The city of Chester, Pa., is seeking bankruptcy protection, aiming to cut hundreds of millions of dollars that it owes in pension obligations and other debts, WSJ Pro Bankruptcy reported. The city’s bankruptcy petition was filed Thursday with the U.S. Bankruptcy Court in Philadelphia under chapter 9. Chester’s chapter 9 filing makes the city the largest U.S. municipality to go bankrupt since Puerto Rico in 2017 and echoes the earlier bankruptcies of the cities of Detroit and Stockton and San Bernardino, Calif., in the years following the 2008-09 financial crisis. Once a thriving industrial and manufacturing hub, Chester has struggled financially in recent decades, and its condition got worse after the COVID-19 pandemic, said Michael Doweary, the city’s receiver since June 2020, in a court filing. Without reorganization, the city would have to expect a deficit of $46.5 million in 2023, $3.6 million in 2024 and $12.5 million in 2025, with the shortfall increasing each subsequent year, he said. Gov. Tom Wolf placed Chester under receivership in 2020, citing its “fiscal emergency.” “The residents of Chester have borne too much burden for too long, and the city can no longer afford to mortgage its future to pay for past and present financial peril,” Mr. Doweary said. One of the biggest financial burdens for the city near Philadelphia has been its obligations to its retirees. The city of about 32,500 people failed to make payments to its three pension plans — for police, firefighters and other employees — between 2013 and 2020, and it owes at least $127.2 million in back payments, Mr. Doweary said.
