CHESTER — In a public presentation broadcast live on Tuesday, Chester’s state-appointed receiver and his staff explained why they needed to file for bankruptcy and seek authority over all administrative functions in the city.
And, he asked the public to stay tuned, giving links to where the community can follow developments on these issues.
“We had a lot of stuff,” catcher Michael T. Doweary said at the start of the briefing to talk about the bankruptcy filing and on the depot that would give his office the final say on all administrative functions regarding city operations.
“I asked the federal courts to help Chester overcome its structural deficit,” he said. “The city cannot rely on a one-time influx of money or point solutions and at this rate the city cannot maintain vital and necessary services unless something serious is done to restructure.”
Vijay Kapoor, the receiver’s chief of staff, said there would be more briefings in the coming weeks as more information became available.
On November 8, Doweary petitioned the Commonwealth Court to amend the existing stimulus plan to give him broader authority so that he or chief operating officer Leonard Lightner would have final say over the city’s administrative duties.
Kapoor said the filing was intended to address “operational impediments the receiver has encountered in performing its duties under Pennsylvania Law 47.”
He said the Commonwealth Court has 30 days from the filing of the plan amendment to hold a hearing and then 60 days to issue a decision.
“This document was filed primarily to address operational issues in the city to ensure the city provides vital and necessary services to the residents of Chester,” Kapoor said.
On Nov. 10, the receiver filed for Chapter 9 bankruptcy protection in the U.S. Bankruptcy Court for the Eastern District of Pennsylvania in light of a potential $46.5 million shortfall next year. , whose filings said $39.8 million is related to overdue pension payments. .
As part of the bankruptcy filing, Doweary is looking for a judicial mediator.
“Our idea is to bring all the parties around a table and come to a global consensus, a resolution, if you will, that we all work together and move in the same direction,” he said. .
Kapoor gave a description of what bankruptcy is.
“Bankruptcy is a process,” he said. “It’s not something that happens overnight. It is not something that completely changes the structure or finances overnight or immediately. It is truly a process that gives the City protection from creditors as it seeks to settle debts and resolve disputes.
He stressed that the city is not closing its doors.
“The city continues to operate as normal,” Kapoor said. “Employees will continue to be paid as before. They will continue to receive their health care. Retirees will continue to receive their pension checks as they did before (and) will continue to receive their health care.
“The city,” Kapoor stressed, “is not closing.”
He added: “Employees should continue to report to work as they did before.”
He said a hearing later on Tuesday would set the schedule for the coming weeks.
“The purpose of a bankruptcy,” Kapoor said, “is to develop a confirmable adjustment plan with all creditors that restructures the financial affairs of the city.”
He said the city is looking to work with commercial suppliers and pay undisputed claims to commercial suppliers as long as those suppliers agree to continue providing services and goods to the cities on the same terms as before the bankruptcy filing. .
“If you are a provider, if there are no disputed claims with your services, we seek to continue to engage you, to continue to pay you as we progress through the bankruptcy process,” Kapoor said. .
Doweary was appointed receiver to create a recovery plan and pull Chester out of financial distress after Governor Tom Wolf declared a budget emergency in the city in April 2020. In this capacity, Doweary was tasked with ensuring that the city continues to provide vital services and needed services to its residents.
Kapoor said they hope to reach a resolution with all parties, if possible.
“We know there are a lot of issues facing Chester,” he said. “We know there are a lot of people involved in this and frankly we need everyone to be able to get Chester back on his feet so he can not just survive but thrive again.”