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City officials: Detroit will go broke in a week if consent deal lawsuit isn’t withdrawn

Posted By yihan On June 8, 2012 @ 8:47 am In Tile,U.S. News | Comments Disabled

Suzette Hackney and Matt Helms
Detroit Free Press [1]
Friday, June 8, 2012

The city of Detroit will run out of cash a week from today if a lawsuit challenging the validity of a consent agreement is not withdrawn, city officials said this morning.

Jack Martin, the city’s new chief financial officer, said the city will be broke by June 15, but it should be able to make payroll for its employees. He said the city will be operating in a deficit situation if the state withholds payments on a portion of the $80 million in bond money needed to help keep the city afloat.

The battle ultimately could lead to an emergency manager if state officials deem the city to be in violation of the consent agreement that gives the state significant control over Detroit’s finances.

Deputy Treasurer Thomas Saxton told the city Thursday that the lawsuit against the consent agreement could force the state to hold back from the city $80 million in revenue sharing that was used, essentially, as collateral for interim refinancing of bonds issued in March so Detroit would not run out of cash.

Full story here. [1]


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URLs in this post:

[1] Detroit Free Press: http://www.freep.com/article/20120608/NEWS01/120608025/1001/rss01

[2] MSNBC: “Detroit is America’s Most Libertarian City”: http://www.prisonplanet.com/msnbc-detroit-is-americas-most-libertarian-city.html

[3] Greeks Rush the Banks; Lines Form at ATMs; Nearly $1 Billion Withdrawn in Past Week: http://www.prisonplanet.com/greeks-rush-the-banks-lines-form-at-atms-nearly-1-billion-withdrawn-in-past-week.html

[4] State laying groundwork for managed bankruptcy for Detroit: http://www.prisonplanet.com/state-laying-groundwork-for-managed-bankruptcy-for-detroit.html

[5] Detroit Citizens Protect Themselves After Police Force Decimated: http://www.prisonplanet.com/detroit-citizens-protect-themselves-after-police-force-decimated.html

[6] Unburied bodies tell the tale of Detroit — a city in despair: http://www.prisonplanet.com/unburied-bodies-tell-the-tale-of-detroit-%e2%80%94-a-city-in-despair.html

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