VBT attorney to address Michigan Supreme Court on leave to appeal

Wayne County Circuit Court last year turned down Van Buren Township’s law suit against Visteon for not planning to help with the upcoming bond payments that tax capture will not cover in the fall of 2019.
The Wayne County court agreed with Visteon that VBT’s motion for summary disposition on the ground that VBT breach of contract claim and request for a declaratory judgment were not yet “ripe for adjudication” and reversal is not required.
It was too soon to sue since the township had suffered no loss as yet, the court said.
The Michigan Court of Appeals agreed in a May 16, 2017 decision.
But, the township pressed on and its attorney Kaveh Kashef has received approval to give an oral argument on his application to have the case go before the Michigan Supreme Court.
In October he will argue before the Michigan Supreme Court to try to convince it to hear VBT’s appeal of the Court of Appeals decision.
Phillip Derosier will argue on behalf of Visteon. Then, the court will decide whether to hear the appeal.
At a recent township meeting, VBT Supervisor Kevin McNamara said while the Michigan Township Association declined joining Van Buren Township in the law suit, the MTA has changed its mind and will join in with VBT in the suit.
Supervisor McNamara said the MTA agrees the decision on this case could affect other townships in the state.
In 2013, when he first started working for the township on the Visteon bonds issue, Kashef was associated with Clark Hill law firm. Recently, he joined Giffels Webster.
In a recent Local Development Finance Authority meeting, the 2017 audit by Plante Moran was discussed.
The audit explained the situation with the bonds: “The township has pledged a portion of future property tax revenue to repay $18,779,656 in LDFA bonds issued in 2003 and a portion refunded in 2006, and then refunded in 2015 to finance various capital improvements.
“The bonds are payable solely from the incremental property taxes captured by the LDFA and were originally projected to produce 100% of debt service requirements over the lives of the bonds. Current economic conditions are resulting in annual captures being less than annual debt service payments.
“Total principal and interest remaining in bonds are $39,157,400, payable through 2032. For the current year (2017), principal and interest paid and total property tax captures were $1,126,265 and $514,807, respectively.”
Plante Moran also stated in the audit report: “All required payments on the bonds are guaranteed by the township in the event that the LDFA is unable to make required payments. Because it has been determined that the township will more likely than not be required to make a payment under this obligation, in accordance with GASB Statement No. 70, the township has recorded a liability on its financial statements for the guarantee. However, the LDFA has not been released from its obligation on this debt.”
According to the audit, beginning in 2019, the LDFA will be paying on the principal, as well as the interest, so its total payment in 2019 will be $2,073,206, up from the total of $521,081 in interest only in 2018.