Detroit city lawyer loses legal battle over consent agreement--but could continue war

Jul 11, 2012

A court has once again rebuffed a Detroit city lawyer's attempts to have the city’s consent agreement with the state overturned.

Detroit’s corporation counsel, Krystal Crittendon, has pushed forward with a legal action that could un-do the consent agreement.

Crittendon maintains that legally, the city can’t enter into any contracts with the state because the state owes the city money.

The state denies that. And Ingham County Circuit Court Judge William Collette dismissed the case, saying Crittendon doesn’t have the authority to bring it.

Crittendon asked Collette to re-consider his decision, and he’s now declined.

But this might not be the end of the road. Crittendon could appeal to the Michigan Court of Appeals.

In the meantime, state and some city officials say the uncertainty prompted by Crittendon’s refusal to back off threatens the city’s already-precarious finances.

Officials say it’s already more difficult for the city to borrow money it needs to re-pay a state loan. And the state has threatened before to turn off the revenue-sharing tap over the issue, saying it would use that money to pay Detroit's jittery bondholders instead.

In a written statement Wednesday, Detroit Mayor Dave Bing said he was "disappointed" in Crittendon's pursuit of this "unnecessary litigation."

"Corporation Counsel’s actions have cost the city money – as of June 27 the city’s interest rate on its $80 million bond has increased from 2.8% to 6.25 %, increasing the city’s borrowing cost by an additional $10,000 per day – and further jeopardizing the city’s revenue-sharing payments from the state," Bing said.