Appointment of emergency financial manager for Detroit challenged in court
March 16, 2013
Kevyn Orr named Detroit emergency financial manager: Gov. Rick Snyder introduces Kevyn Orr as Detroit's new Emergency Financial Manager. Orr is a University of Michigan graduate who knows he has 18 months to get Detroit's finances in order. Eric Seals/Detroit Free Press
LANSING -- Legal challenges are pending to Thursday's appointment of an emergency financial manager for Detroit, and an activist said Friday a new Michigan Court of Appeals opinion is helpful to one of his cases.
Robert Davis of Highland Park, who heads Citizens United Against Government Corruption, said he filed a lawsuit late Thursday in Ingham County Circuit Court alleging violations of the Open Meetings Act by the Emergency Financial Assistance Loan Board, which formalized the appointment of Kevyn Orr, a Washington, D.C., attorney.
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The board voted 3-0 Thursday to appoint Orr, based on Snyder's recommendation, and after conducting a public interview with Orr through a video hookup.
The Court of Appeals released an opinion Friday upholding a $332,837 judgment against former Highland Park emergency financial manager Arthur Blackwell II, who was sued by the loan board in 2009 for breach of contract, conversion of funds and breach of fiduciary duty.
The suit alleged Blackwell unlawfully paid himself $264,000.
Washington, D.C. lawyer Kevyn Orr, 54, addresses the media at the Cadillac Center in Detroit on Thursday March 14, 2013, after being named as a candidate by Governor Rick Snyder as the emergency financial manager for the city of Detroit. Ryan Garza/Detroit Free Press
A three-judge appeals panel said Granholm had no authority to make such a deal.
"The governor's authority is limited to determining whether a financial emergency exists and assigning the responsibility for managing the emergency to the board," the court said. "Public officers have
and can exercise only such powers as are conferred on them by law."
Davis, who is under federal indictment in connection with theft from the Highland Park Schools as a board member, said the opinion strengthens his argument that Snyder overstepped his authority in recruiting Orr. A hearing is set for April 8 before Judge James Jamo.