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Economy Briefs

- - Sunday, December 11, 2011

PENNSYLVANIA

Harrisburg City Council renews bankruptcy bid

HARRISBURG — The Harrisburg City Council has appealed a judge's decision to throw out the bankruptcy petition of Pennsylvania's debt-choked capital city, its attorney said.

The appeal was filed Saturday in federal court, City Council attorney Mark Schwartz said in an email.

Last month, a federal bankruptcy judge ruled that Harrisburg may not seek bankruptcy protection, calling such a filing illegal. That ruling cleared the way for the state to take over the city.

The judge said the city had been legally barred by a separate state law, signed June 30 by Gov. Tom Corbett, from seeking bankruptcy protection and, in any case, had no authority to go over the mayor's head to file it.

Mr. Schwartz said he thinks that decision was wrong.

"As I have said, with all due respect, I feel that the decision was in error," he said. "Moreover, this is a case that could very well end up in the U.S. Supreme Court."

MF GLOBAL

Judge OKs release of $2.2B to clients

The judge overseeing the bankruptcy of MF Global has approved releasing $2.2 billion more in frozen funds to customers of the firm.

U.S. Bankruptcy Judge Martin Glenn issued an order Friday that clears the way for customers to regain some of their money.

It's the third transfer of funds to MF Global customers since the firm filed for bankruptcy protection on Oct. 31. The transfer will bring the total distributed to customers so far to about $4.1 billion.

The transfer, which a bankruptcy trustee requested Nov. 29, is expected to take two to four weeks. Once completed, MF Global commodities customers will have recovered about 72 percent of their money, according to the trustee for the liquidation of the brokerage firm formerly led by Jon Corzine, a Democrat who had been a New Jersey governor and senator.

The frozen funds are separate from the $1.2 billion or more that is estimated to be missing from MF Global customer accounts. MF Global collapsed after making a disastrous $6.3 billion bet on European debt.

COMMERCE

Trade deficit shrinks for 4th straight month

The U.S. trade deficit narrowed in October to its lowest point of the year after Americans bought fewer foreign cars and imported less oil.

The shrinking trade gap boosted growth over the summer and may do so again in the final three months of the year. But economists worry the trend could reverse next year, especially if Europe's debt crisis worsens.

The Commerce Department said Friday that the trade deficit shrank 1.6 percent to $43.5 billion. It was the fourth straight monthly decline.

Overall imports fell 1 percent to $222.6 billion, which largely reflected a 5 percent decline in oil imports. The average price of imported oil fell for the fifth straight month to the lowest level since March. Oil prices rose last winter because of turmoil in the Middle East and North Africa.

Exports slipped 0.8 percent to $179.2 billion, the first drop after three months of gains. Shipments of industrial supplies, such as natural gas, copper and chemicals, fell. Exports of autos and agricultural goods also dropped.

From wire dispatches and staff reports