Judge Hears Lawsuit Over Detroit Financial Deal

DETROIT (WWJ/AP) – An Ingham County judge is holding a hearing on Detroit’s top lawyer’s challenge to a consent agreement between Michigan and the deficit-ridden city.

The April deal between Mayor Dave Bing and Gov. Rick Snyder seeks to forestall the appointment of an emergency financial manager for Detroit.

Detroit Corporation Counsel Krystal Crittendon challenged the deal, saying it violates Detroit’s charter. The case is being heard Wednesday morning in Mason.

Crittendon says the charter prohibits Detroit from making contracts where at least one side owes the other money. She says Michigan owes Detroit $220 million in revenue sharing.

The mayor has said the city will go broke by Friday if the lawsuit is not dropped, because the state is threatening to withhold $80 million in revenue sharing. He’s also directed Crtttendon to halt the action, although it’s unclear whether her autonomy under the charter lets her ignore the order.

Detroit is under a consent agreement with the state, which gives an outside board control of much of the city’s finances. Before the consent agreement, Detroit was on course to be more than $400 million in debt, and was reportedly on the brink of bankruptcy.

The new budget includes $250 million in cuts and calls for the elimination of more than 2,500 jobs.

Our reporters will be in the courtroom. Stay with WWJ Newsradio 950 and CBSDetroit.com for the latest.

MORE: Bing Demands City Lawyer Drop Lawsuit Opposing Consent Agreement

Mayor Bing: 4 Days Until Detroit Goes Broke

State Warns Lawsuit Could Cost Detroit $80M In Revenue Sharing

TM and © Copyright 2012 CBS Radio Inc. and its relevant subsidiaries. CBS RADIO and EYE Logo TM and Copyright 2012 CBS Broadcasting Inc. Used under license. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. The Associated Press contributed to this report.

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