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Tags: Detroit | Finances

Mayor: Lawsuit Could Cause Detroit to Go Broke

Monday, 11 June 2012 04:31 PM EDT

Detroit's mayor is warning that the city could go broke if its top lawyer refuses to drop her lawsuit challenging a deal with Michigan officials that seeks to rescue the city's finances.

The most recent clash between Mayor Dave Bing and the city's Corporation Counsel Krystal Crittendon underscores how precarious Detroit's situation remains, even after the deal was signed in April.

Crittendon's suit targets that specific agreement, but Bing and state officials say it also could imperil a separate contract allowing the city to sell bonds to pay short-term bills. If potential buyers of those bonds are scared off, the bank to intercept the revenue sharing money the city used to secure them.

Detroit's accumulated budget deficit is more than $200 million and its long-term structural debt tops $13 billion.

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Monday, 11 June 2012 04:31 PM
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