Tuesday, September 20, 2011

Sale of Silverdome-Court of Appeals Ruling 9/20/11

S T A T E- O F- M I C H I G A N- C O U R T- O F- A P P E A L S-- 298649-0.pdf (application/pdf Object)

298649-0.pdf (application/pdf Object) 
UNPUBLISHED September 20, 2011, No. 298649, LC No. 2009-105475-CZ, Oakland Circuit Court

SILVER STALLION DEVELOPMENT CORPORATION, Plaintiff-Appellant,
v
CITY OF PONTIAC, CLARENCE E. PHILLIPS,
FRED LEEB, and WILLIAMS & WILLIAMS
MARKETING, Defendants-Appellees.

Before: SAWYER, P.J., and JANSEN and DONOFRIO, JJ.

"Defendant Leeb testified that he continued to negotiate on behalf of defendant City with prospective purchasers including plaintiff, but all of his negotiations were “ineffectual” because no buyers wanted to put up cash to purchase the property. Leeb stated that “due to past difficulties in dealing with City administrations, the depressed state of the local economy, and the high cost of demolition, three major real estate developers stated that they would not take on the Silverdome project even if it were provided to them at no cost.” According to Leeb, in order to stop the “cash bleeding” that was occurring due to the high cost of maintaining the Silverdome, defendant City decided that the property should be auctioned prior to the winter months in 2009."

"Defendant City continued to identify and negotiate with potential bidders including plaintiff as the auction approached in an attempt to encourage potential buyers who were not interested in the auction to submit firm financing commitments. Defendant City had arranged with defendant Williams & Williams Marketing, Inc. that it could cancel the auction at any time and accept a private offer."

"To the contrary, there is a multitude of documentary evidence in the record that defendants in fact repeatedly encouraged plaintiff to continue negotiations and to secure financing for the purchase even after plaintiff failed to close on the property at the time of the 2008 agreement. Because plaintiff’s argument is wholly unsupported by the record, plaintiff has not sustained its burden to show a genuine issue of disputed fact for trial.... Quinto, 451 Mich at 362; Innovative Adult Foster Care, Inc, 285 Mich App at 475. 2"

"In accordance with our authority, this Court awards costs to defendants as the prevailing parties pursuant to MCR 7.219(A). Further, pursuant to MCL 600.2445(3) and MCR 7.216(C)(1)(a), (2), this Court sua sponte orders damages against plaintiff for this vexatious appeal. Plaintiff took this frivolous appeal “without any reasonable basis for belief that there was a meritorious issue to be determined on appeal[.]” The record was devoid of merit supporting any of plaintiff’s claims both in the trial court and on appeal. Plaintiff attempted to thwart the sale of the Silverdome to another qualified buyer even though it had no contractual basis to do so. This action is especially disconcerting considering the fact that it was so well known that defendant City was suffering financially and needed to sell the Silverdome property because it could no longer afford the significant maintenance costs. The trial court shall award reasonable attorney fees in favor of defendants in an amount to be determined by the trial court together with any other damages or costs it deems appropriate as a result of plaintiff’s engagement in these baseless, vexatious proceedings."

"Affirmed and remanded for proceedings consistent with this opinion. We do not retain jurisdiction."

/s/ David H. Sawyer
/s/ Kathleen Jansen
/s/ Pat M. Donofrio

Tuesday, March 15, 2011

Mar-2011-Michigan-TMA-Newsletter

Mar-2011-Michigan-TMA-Newsletter.pdf (application/pdf Object)

TMA Michigan Newsletter Pages 5-8

Perspectives on Governmental Financial Crises and

Governor Snyder’s Budget Proposal for Fiscal Year 2012

By Fred P. Leeb
Fred Leeb & Associates and the Nonprofit Management Group

Forty-five states and the District of Columbia are projecting budget shortfalls (revenues less than the costs of services) totaling $125 billion for fiscal year 2012 (the year beginning July 1, 2011, FY12”). Michigan’s shortfall was estimated to be $1.8 billion of this total. On February 17, 2011, Governor Rick Snyder proposed a budget for FY12 incorporating what seems like many draconian measures to deal with this financial crisis. The purpose of this article is to provide perspective on the depth of the problem as compared to other states and to understand why a turnaround plan for Michigan is necessary now.

Summary
1. Michigan’s projected budget shortfall is large but less than that of many other states. Michigan, however, can no longer rely on Federal Recovery Act Funds to fill the gap and mask the underlying structural problems that it is facing.
2. The budget will continue to be squeezed by falling revenues and increasing needs for governmental services. It will get more difficult each year to develop additional solutions.
3. There is no rainy day fund to fall back upon.
4. Job losses have been severe and regaining lost ground will be very slow.
5. Unfunded pension and retiree health care benefits will be the “elephants in the room” for a long time to come.
6. Both state and local governments are in financial crises and the local governmental units will have tremendous difficulties in dealing with any additional fiscal burdens passed on to them by the state.
7. The Treasury Department’s measures of financial stress must be improved and made much more timely to provide a meaningful early warning system.
8. A new sense of urgency on the part of governmental officials is developing and new legislation to provide more authority to the Emergency Financial Manager should help significantly.