Harrisburg Creditors Name Choice for Incinerator Receiver

Creditors of Harrisburg, the capital city of Pennsylvania, asked a judge to appoint a retired sewer executive to run the waste-to-energy incinerator that is responsible for pushing the city into insolvency.

Assured Guaranty Municipal Corp. and TD Bank NA asked state court judge Todd A. Hoover to name Robin Davidov of Maryland as the receiver to take over the incinerator, which is owned by the Harrisburg Authority, a municipal agency.

Hoover ruled last month that the agency should be replaced with a receiver, as requested by TD Bank and Assured, a unit of Assured Guaranty Ltd. (AGO)

Hoover’s ruling was cited by David Unkovic when he resigned as the state-appointed official in charge of fixing Harrisburg’s finances. Unkovic, who also held the title of receiver, asked state and federal authorities to investigate “possible illegal activities” in financing an overhaul of Harrisburg’s incinerator.

Unkovic had unsuccessfully opposed the appointment of a receiver to run the incinerator, arguing that it could interfere with his duties. Unkovic was appointed by Pennsylvania Republican Governor Tom Corbett.

Hoover said he didn’t believe an incinerator receiver would interfere with the receiver for the city. Court-appointed receivers like the one proposed for the incinerator typically manage a facility on behalf of creditors to make sure debts are paid on time.

Financial Crisis

Unkovic had proposed selling the incinerator and other city assets to help end Harrisburg’s financial crisis.

Davidov retired last year as executive director of the Northeast Maryland Waste Disposal Authority, which controlled four waste-to-energy plants near Baltimore that generated $23 million in electricity sales, according to documents filed March 30 in state court in Dauphin County.

Bob Philbin, a spokesman for Harrisburg Mayor Linda Thompson, declined to comment on the request for Davidov.

“She wants the incinerator sold as quickly as possible with the highest return,” he said of the mayor.

Shannon Williams, interim executive director of the Harrisburg Authority, didn’t immediately return a call for comment.

The city of 49,500, where 30 percent live in poverty, announced March 9 it would miss $5.27 million in general- obligation bond payments due March 15.

The receiver case is TD Bank NA, v. The Harrisburg Authority, 2010-CV-11737, Court of Common Pleas, Dauphin County, Pennsylvania (Harrisburg).

To contact the reporters on this story: Steven Church in Wilmington, Delaware, at schurch3@bloomberg.net; Romy Varghese in Philadelphia at rvarghese8@bloomberg.net

To contact the editors responsible for this story: John Pickering at jpickering@bloomberg.net; Mark Tannenbaum at mtannen@bloomberg.net