Michigan tells Detroit to drop consent lawsuit or lose millions in shared revenue

Published On: Jun 08 2012 08:16:07 AM EDT   Updated On: Jun 08 2012 08:16:39 AM EDT

Detroit Mayor Dave Bing has called an emergency meeting to talk about threat from state.


Detroit is sitting on the edge of financial collapse again.

The city's top lawyer is suing to stop Detroit from entering into a financial stability agreement with the state of Michigan. The claim is that Michigan is in default to Detroit and that the state has not paid the city enough in shared revenue for years. It's to the tune of hundreds of millions of dollars.

The state of Michigan wants the lawsuit pulled immediately because of bond financing. The state floated Detroit $80 million to refinance bonds. That must be completed by the end of June. If there is no financial stability agreement in place by then, the state will take money that was meant for Detroit to pay off the bond financing.

The lawsuit is being called a legal strategy. A top municipal attorney told Local 4 it is absurd and a total misrepresentation of the city charter, and utterly doomed to fail. The attorney wanted to remain anonymous.

Former Detroit City Councilwoman Sheila Cockrel agrees.

"I think there are very serious consequences to this situation and I think that really one of the biggest dangers here is that the way that this, what I think is preposterous, legal strategy is being executed by the corporation council's office," Cockrel said.

Detroit Mayor Dave Bing released a statement Thursday night, but did not respond to interview requests.

"My team is working closely with the state to mitigate any negative impacts on my administration's plan to financially stabilize the city," the mayor's statement read. "We want this matter resolved expeditiously for the sake of the citizens of Detroit."

Bing has scheduled an emergency meeting with City Council for 10 a.m. Friday.


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