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

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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.

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