Creditors at township door

Township chooses bankruptcy protection

By TOM KANE

MATAMORAS, PA — How do you tell a township of 2,400 residents that they are being sued for $20 million and that it may have to come out of their taxes?

On Wednesday, April 29, the Westfall Township board of supervisors called a special meeting and related the sad news to a full house with a camera crew and members of the press taking down every word.

From the Pledge of Allegiance forward, township attorney Robert F. Bernathy conducted the meeting. His job was to relate the history of the two court rulings that imposed the harsh judgments, but not to comment on the bankruptcy proceedings.

“The board has made a very brave decision to file for Chapter 9 bankruptcy,” Bernathy said. “We are being advised in these proceedings by a very prestigious law firm that specializes in bankruptcy, Pepper and Hamilton of Philadelphia, and it is their position that our bankruptcy case has merit and is not frivolous. We are hoping that the bankruptcy court will dismiss the case.”

The township’s problems began in the 1980s, when New Jersey developer David Katz and his wife bought 748 acres in north Milford overlooking the Delaware River in order to build a development of 1,500 homes. The township board at the time rezoned the land, which was a popular spot for hunters and fishermen, and restricted the use to those purposes.

“I want to be clear about this,” Bernathy said. “These current board members were not involved in any of the decisions about this case.”

There followed a series of actions taken by the then sitting board that two court decisions indicated violated the Katz couple’s civil rights, one of the decisions by a jury.

“We’re not going to discuss who was to blame but rather we need to be clear about the actions we are taking,” Bernathy said.

The decisions by the two court cases left the township with a judgment of $20 million. The township’s annual budget is approximately $1 million.

“If we were to pay for these judgments by raising taxes, each household would have to pay $25,000 in taxes, which is impossible,” he said.

Numerous residents made comments and asked questions.

“Will this mean that there will be a lien on our homes if we can’t pay?” one citizen asked.

“The obligation rests with the township, not with the residents,” Bernathy said.

There will be a meeting conducted by the bankruptcy court on June 2 between Katz and the township that is not open to the public.

The next meeting of the township board will be held on June 9 at 7:00 p.m. “We will have more information for you at that time on the status of the bankruptcy,” Bernathy said.

Meanwhile, the township can conduct business as usual under the provisions of Chapter Nine.