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Crippled by Pension Debt, Pennsylvania City Seeks Bankruptcy

  • Receiver files for Chapter 9 bankruptcy, a rare move by cities
  • Step comes after decades of fiscal distress, population loss
Chester

Photo: Hadriana Lowenkron/Bloomberg

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Chester, Pennsylvania, a city near Philadelphia that’s been contending with financial distress for decades, filed for bankruptcy protection because of a massive debt to its employee pension funds. 

Michael Doweary, a state-appointed receiver empowered to oversee the city’s finances, filed the petition under Chapter 9 of the US Bankruptcy Code in the Eastern District of Pennsylvania. The filing will protect the city from creditors while it works on a plan to steady its finances.