DWSD Kilpatrick Interceptor Contractors
Macomb Interceptor Drain Drainage District,
City of Detroit and Detroit Water and Sewerage Department
Kame Kilpatrick, Lakeshore Engineering Services Inc. etc al
Crain’s Detroit Business article – February 23, 2014 8:00 AM
• Venue: U.S. District Court, Detroit, Judge Robert Cleland
• Case filed: July 18, 2011
• Settlement: $5.3 million
(as to Lakeshore and DLZ Michigan Inc. only).
• Date: Feb. 13, 2013
• Plaintiffs: Macomb Interceptor Drain Drainage District,
a corporation of 11 Macomb County municipalities chaired
by county Public Works Commissioner Anthony Marrocco.
Intervening plaintiffs Detroit and Detroit Water and
Sewerage joined in January 2012.
• Lead counsel: Jerome Watson, W. Mack Faison,
principals, Miller Canfield Paddock and Stone PLC,
Detroit, for the city and DWSD
• Defendants: Kame Kilpatrick; Bobby Ferguson;
Bernard Kilpatrick; Derrick Miller;
Lakeshore Engineering Services Inc. (now Lakeshore TolTest Corp.),
Detroit; Superior Engineering Associates Inc. of Southfield;
Mersino Dewatering Inc. of Davison; and 32 other individual
and corporate defendants, most of them already dismissed
• Lead counsel: Walter Piszczatowski, partner, Hertz Schram PC,
Bloomfield Hills, for Lakeshore Engineering and
Chairman Avinash Rachmale. Barry Lubow, vice president and
general counsel, DLZ Corp., Ohio
About the case
Detroit-based Lakeshore TolTest Corp. and the Michigan subsidiary
of DLZ Corp. in Columbus, Ohio, entered settlement deals worth
a combined $5.3 million to end pending and prospective
litigation as contractors involved in the far-flung
Kilpatrick corruption scandal.
Lakeshore, originally named “Company L” in a December 2010
indictment of former Detroit Mayor Kame Kilpatrick and
four others, in February agreed to pay $2.57 million cash
and give the city about 24 acres of land one of its
companies owns near the wastewater treatment plant on Jefferson Avenue.
DLZ entered a settlement of its own for about $200,000
around the same time, over and above the Lakeshore deal
valued at nearly $5.1 million. The two deals supplement
a 2012 agreement for Inland Waters Pollution Control Inc.
and two other Inland companies to settle their portion
of the case for $4.5 million; that brings
total settlements to date to about $9.8 million.
The settlements are with the city and its Detroit Water
and Sewerage Department, and they resolve both potential
litigation the city planned to file through
Miller Canfield Paddock and Stone PLC,
and some of Detroit’s claims as an intervening plaintiff
in the Macomb Interceptor Drain Drainage District lawsuit.
The district, made up of several Macomb County communities,
sued in 2011 over some debt it picked up from DWSD in
purchasing several pump stations and interceptors —
including a Sterling Heights interceptor where the city
was overcharged on some repairs.
The city later joined in that lawsuit.
Kilpatrick; his father, Bernard Kilpatrick; and
water department contractor Bobby Ferguson
were convicted by jury in March after a
racketeering trial involving various contracts
awarded during Kilpatrick’s administration.
Lakeshore allegedly was extorted by Ferguson into
steering more than $12 million worth of work to
Ferguson’s company on an improvement to
water mains on the city’s east side.
Then-CEO Avinash Rachmale was a prosecution witness
against Kilpatrick and his co-defendants,
as was DLZ’s former COO, Pratap Rajadhyaksha.
DLZ allegedly dealt in Ferguson as a subcontractor
on a 2004 bid to replace a downtown water main,
despite having lower bidders.
Kilpatrick and Ferguson received federal prison sentences
of 28 years and 21 years, respectively, in the criminal case.
The city plans to file motions for summary judgment
within weeks, seeking civil damages.