The Detroit Water and Sewerage Department is suing U.S. Bank claiming that it spent over $2.3 million on lawyers and financial advisers who responded to nervous investors in the wake of the city’s bankruptcy filing last summer, the Detroit Free Press reported today. U.S. Bank serves as trustee for the department’s bonds and received numerous calls after the filing. U.S. Bank asked for additional fees to cover the cost of responding, but water department officials noted that water and sewer bonds were being paid in full, according to a pleading filed in the bankruptcy case. Late last year, U.S. Bank and the water department held several negotiations on fees but never agreed. U.S. Bank used in-house lawyers to handle some of the work and hired Waller, Lansden, Dortch & Davis, LLP and Bodman, PLC to do the rest. The bank deducted the $2.3 million from fees that come in from the water department.
