On Thursday, January 1, 2026, BridgeDetroit reported that Judge Sheila Gibson of the Michigan 3rd Circuit Court recused herself from a contentious Detroit foreclosure case, raising questions about the fairness and transparency of Wayne County’s process for repaying surplus proceeds from past tax foreclosures to former homeowners.
The recusal occurred last month, with Gibson citing the need to avoid “an appearance of impropriety” in a court filing, though neither she nor court officials provided further details regarding her decision or her personal connection to the claims process.
The case revolves around Detroiters’ claims that Wayne County has been using an opaque legal process to avoid paying them profits from past tax foreclosures, funds that courts have ruled must be returned. The controversy intensified when it was revealed that Gibson herself may be among those owed money by the county, potentially missing out on over $26,000 due to her failure to file a claim form before the April 8 deadline. This revelation has sparked concern among other Detroiters awaiting their payments, with Latesa Sanders, who lost her home to foreclosure in 2018, expressing dismay that even someone within the system could be affected.
Gibson’s situation is linked to a 2015 foreclosure when Wayne County seized a vacant plot she owned in the Palmer Woods neighborhood due to $11,300 in unpaid taxes. The property was subsequently auctioned off for $39,000, potentially entitling her to the surplus funds. Public records also indicate that Gibson is listed as an owner on another property currently facing foreclosure for unpaid taxes, which could lead to a future claim if the property is sold at auction for a profit.
The claims process has been criticized for its slow pace and lack of publicity, with many claimants, often low-income individuals, expressing frustration over delays in receiving their funds. Kim James, who filed a motion to claim auction profits in September, reported not having received any feedback. Outlier Media played a significant role in informing Detroiters about the claims process, highlighting the county’s minimal effort to publicize it.
The delay in resolution for hundreds of former homeowners may have been exacerbated by Gibson’s recusal, although Third Circuit Chief Judge Patricia Fresard has since taken over the claims process and signed some orders. A key factor contributing to the slow pace is Wayne County’s refusal to settle a lawsuit demanding repayment of surplus proceeds from past tax auctions, unlike most other counties in Michigan. A settlement would streamline the process and create more uniform outcomes for claimants.
Source: BridgeDetroit
