Detroit — The city’s bankruptcy judge is expected to decide Monday on a Macomb County creditor’s request to increase the value of its claim, a move that could give the unsecured creditor more standing in the voting tabulation of the city’s debt-cutting plan.
The Macomb Interceptor Drain Drainage District argued in federal court Thursday for U.S. Bankruptcy Judge Steven Rhodes to set the claim at $26 million. The city objected to the drainage district’s proof of claim in bankruptcy and has valued it at $1.
In 2011, Macomb County Public Works Commissioner Anthony V. Marrocco filed a lawsuit on behalf of the drainage district over a controversial sewer collapse and repair project, which factored prominently in a racketeering conspiracy indictment against Detroit’s former mayor Kwame Kilpatrick and others.
The $25.5 million lawsuit accused Kilpatrick, Detroit’s former water boss Victor Mercado, contractor Bobby Ferguson and Kilpatrick’s former aide Derrick Miller of scheming to steal money from the sinkhole repair project for themselves.
The drainage district claim is listed in class 14, among other unsecured creditors. Each class of creditors in Detroit’s bankruptcy requires a majority vote in favor of the city’s plan of adjustment. Those who vote yes must also represent two-thirds of the amount of the claims for the plan to be approved.
The drainage district contends that the city, in pleadings before the U.S. District Court, acknowledged and adopted claims for $23 million to $27 million in overcharges against certain third-party contractors in connection with criminal fraud in the 15 Mile Road project. The city has rejected the allegations.