Reuters: U.S.: Harrisburg ex-receiver cites creditors as issue

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Harrisburg ex-receiver cites creditors as issue May 24th 2012, 19:12 Thu May 24, 2012 3:12pm EDT (Reuters) - The former receiver for the Pennsylvania capital city of Harrisburg testified on Thursday that he had quit because his ability to do his job was "undermined" by the role of creditors and because he believed he was about to be fired. In his first public comments since his sudden resignation at the end of March, David Unkovic said in a hearing before Commonwealth Court Judge Bonnie Leadbetter that he left because "creditors' control of the incinerator fundamentally undermined" his ability to do his job. Harrisburg has been struggling under a roughly $320 million debt stemming from renovation of its trash incinerator. Unkovic, who testified as part of a hearing on the appointment of retired U.S. Air Force Major General William Lynch as the Harrisburg receiver, also said, "I believed I was about to be removed as receiver." Unkovic had been appointed by Pennsylvania Governor Tom Corbett to craft a recovery plan for Harrisburg. In his resignation letter in March, he said he left because "political and ethical crosswinds" made it impossible for him to do his job. A separate receiver for the incinerator was appointed in March following a request by creditors - including bond insurer Assured Guarantee Municipal Corporation and TD Bank - and bondholder trustee M&T Bank. None of the creditors was immediately available to comment. A few days after the receiver for the incinerator was named, Unkovic asked federal and state investigators to probe an audit that found high-ranking public officials did not vet repair costs for the waste-to-energy facility, even though the incinerator was already deeply in debt. Shortly later, Unkovic also openly criticized politicians. The next day, he now says, Corbett's general counsel told him that his comments would hinder negotiations with creditors. "We felt the outbursts and his way of carrying himself was detrimental to the recovery process," Steve Kratz, the spokesman for the state's Department of Community & Economic Development, said on Thursday after Unkovic testified. The department oversees distressed municipalities in receivership. Kratz denied that there was any implication from state officials at the time that Unkovic would be fired. "It's necessary that all speculation and gossip and rumors be put to rest," Leadbetter told the court after Unkovic took the witness stand. "We need to put the resignation of the former receiver behind us so we can move forward." (Reporting by Mark Shade; Writing by Hilary Russ; Editing by Editing by Leslie Adler) Link this Share this Digg this Email Reprints

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