Bing: Detroit to go broke if lawsuit isn't dropped

Bing: Detroit to go broke if lawsuit isn't dropped

Posted: Updated:
Detroit Mayor Dave Bing speaks to the media on Friday morning.  (Credit: WJBK | myFOXDetroit.com) Detroit Mayor Dave Bing speaks to the media on Friday morning. (Credit: WJBK | myFOXDetroit.com)
DETROIT (WJBK) -

Detroit could be broke in a week if a lawsuit challenging a consent agreement to fix the city's finances is not dropped. That's the bombshell Mayor Dave Bing dropped on Friday.

"We could eventually, in a short period of time, run out of cash," said Bing at a press conference.

Just when you thought the city's deal with the state to keep the lights on was a done deal, here is another legal loophole to tell you about.  Depending on who you ask, it's a back and forth that's "hardball" says Detroit City Council President Charles Pugh.

"We're going to have to play and we're going to have to fight for what we feel is right."

He sees this as another snag that needs to play out, but the mayor sees this as more than just hardball.

"It is an emergency. It's a crisis. We've been in a crisis for a long time. This just ups the ante more than anything else, and I think from a leadership standpoint, it's incumbent upon us as leaders to deal with this expeditiously."

Work quickly to reverse what's been done. A lawsuit, and here's where that stems from. The city appointed Krystal Crittendon as Detroit's head lawyer or corporation council. She says the city cannot enter into the financial stability agreement the council narrowly approved in April. The reason?  She says the State of Michigan owes Detroit hundreds of millions of dollars in revenue sharing and millions more in parking tickets and other debts, so Crittendon filed a lawsuit against the state. The state, in turn, says they may have to hold back on the $80-million that was agreed on to pay out to the city.

The mayor says his hands are tied.  He alone can't do anything but try to convince Crittendon to change her mind and drop the suit.

And so the city says they'll run out of cash soon.

Municipal attorney Patrick McCalley told us the state will have to show that the financial stability agreement is what's best for the city.

"They may also have the option of saying this lawsuit has, in essence, created a default by the city under the financial stability agreement such that the state now has other remedies, including seeking a receiver and the appointment of an emergency financial manager.  So, that could be the state's counter to the lawsuit right now."

And so we see the corporation council has a lot more power than you may have thought. The revised charter gives her the power to challenge the consent agreement even if the mayor isn't on board.

What's the next move for the mayor and for this deal?

The mayor had planned to meet with city council on Friday morning, but because they didn't post the meeting in the 24 hours notice that they should have given, they have rescheduled it for Monday morning at 8:00 a.m.  Also, an Ingham County judge is holding a hearing on this entire case on Wednesday. He'll have to weigh in on the validity of this lawsuit.

  • Local NewsLocal NewsMore>>

  • Van Dyke Construction Scheduled Today

    Van Dyke Construction Scheduled Today

    Monday, April 21 2014 3:48 AM EDT2014-04-21 07:48:59 GMT
    A massive construction project is underway in Macomb County. If you travel on Van Dyke, you know how rough it is. Now, jackhammers are out there tearing up a two-and-a half mile stretch from 11 Mile to Chicago Rd. The road will be milled, then resurfaced with asphalt. New curbs will be installed. Nine intersections get new traffic signals. Sidewalks will be ramped to comply with the Americans with Disabilities Act. Weather permitting, the project will be finished this summer.
    A massive construction project is underway in Macomb County. If you travel on Van Dyke, you know how rough it is. Now, jackhammers are out there tearing up a two-and-a half mile stretch from 11 Mile to Chicago Rd. The road will be milled, then resurfaced with asphalt. New curbs will be installed. Nine intersections get new traffic signals. Sidewalks will be ramped to comply with the Americans with Disabilities Act. Weather permitting, the project will be finished this summer.
  • Chrysler Expanding Presence in China

    Chrysler Expanding Presence in China

    Monday, April 21 2014 3:32 AM EDT2014-04-21 07:32:50 GMT
    Fiat and Chrysler announced plans this weekend to build three new Jeep models in China for that market, the biggest for the vehicles outside the United States, as they attempt to boost sales in a country where they lag behind their competitors. The automakers said they will expand their joint venture with China's Guangzhou Automobile Group Co. Ltd., and increase the portfolio of Jeeps, which are currently imported to China. Production is expected to start in late 2015.
    Fiat and Chrysler announced plans this weekend to build three new Jeep models in China for that market, the biggest for the vehicles outside the United States, as they attempt to boost sales in a country where they lag behind their competitors. The automakers said they will expand their joint venture with China's Guangzhou Automobile Group Co. Ltd., and increase the portfolio of Jeeps, which are currently imported to China. Production is expected to start in late 2015.
  • Ford at the Beijing Auto Show

    Ford at the Beijing Auto Show

    Monday, April 21 2014 3:27 AM EDT2014-04-21 07:27:48 GMT
    Ford Motor Co. on Sunday unveiled a new Escort sedan designed in China for global sale at a Beijing auto show that highlighted the growing influence of Chinese tastes on the industry. Automakers are looking to China's biggest auto show this year to help boost sales in this huge but cooling market. Total sales last year reached 17.9 million vehicles, but growth is expected to slow from 15.7 percent to as low as 8 percent, even as newcomers including Lincoln and Tesla enter the market.
    Ford Motor Co. on Sunday unveiled a new Escort sedan designed in China for global sale at a Beijing auto show that highlighted the growing influence of Chinese tastes on the industry. Automakers are looking to China's biggest auto show this year to help boost sales in this huge but cooling market. Total sales last year reached 17.9 million vehicles, but growth is expected to slow from 15.7 percent to as low as 8 percent, even as newcomers including Lincoln and Tesla enter the market.
Powered by WorldNow

KTBC FOX 7
119 East 10th Street
Austin, TX 78701

Phone: (512) 476-7777
Fax: (512) 495-7001

Didn't find what you were looking for?
All content © Copyright 2000 - 2014 Fox Television Stations, Inc. and Worldnow. All Rights Reserved.
Privacy Policy | Terms of Service | Ad Choices