Scranton Pennsylvania Careens Towards Bankruptcy As Unions Look to Seize Assets

With public unions threatening to seize Scranton assets including fire trucks, how long will it take for Scranton to do the smart thing and declare bankruptcy?

The Times-Tribune reports Scranton police/fire unions get $21M judgment against city; may seize assets to collect.

Scranton’s police and fire unions have received a judgment against the city for the overdue $21 million that the city owes the unions from a landmark arbitration ruling.

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The money was due July 2, but the city has not yet paid and is still seeking borrowing or selling an asset to honor the bill, Mayor Chris Doherty said.

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But the judgment means the unions now can seize city assets and sell them to collect what is owed, said city solicitor Paul Kelly and the unions’ attorney, Thomas Jennings.

“Whenever a judgment is granted, you can go to the sheriff and levy against assets,” Mr. Kelly said. “They (the unions) can sell city assets. They can sell firetrucks, garbage trucks – they can sell City Hall.”

Mr. Jennings said, “Do I want to take firetrucks and City Hall? Of course not. But would I do it if I have to? In a New York minute.”

Real Whiff of Union Priorities

Consider a comment to the article by KMCG who says …

At least now we are getting a real whiff of union priorities. Years of controlling City Hall through weak mayors, outrageous health care benefits, salaries that are double and triple the average Scrantonian’s salaries, overtime scams, longevity pay, fat pensions….the list is endless. And when there’s nothing left after they’ve picked the bones of the city’s coffers for decades, they look to seize assets? I can hear them licking their greedy, greasy fingers now.

Indeed. But it is not just greedy unions. It takes two to tango. Greedy politicians willfully entered into devilish bargains with unions to get reelected.

That is neither here nor there right now. And to throw still more clichés into the mix, it’s all water over the dam.

Best Way Forward 

Scranton must decide – and soon – the best way forward. And so must the unions.

In that regard, I suggest to the city of Scranton: file bankruptcy immediately, before the union seizes assets.

Reflections on Municipal Bonds 

As I have said repeatedly, if you are a municipal bond investor, please be careful. Cities can and will file for bankruptcy. 

For further reading, please consider Chicago: Bankruptcy Straight Ahead

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