Detroit on 'razor's edge' before bankruptcy

Associated Press
Protesters rally outside The Theodore Levin United States Courthouse in Detroit, Wednesday, Oct. 23, 2013. The city of Detroit for months has disclosed the awful condition of its finances. Now it’s up to a judge to determine if the largest public bankruptcy in U.S. history really can go forward. An unusual trial starts Wednesday, pitting Detroit’s emergency manager and his legal team against unions and pension funds that claim the city isn’t qualified to scrub its books clean under Chapter 9 bankruptcy. (AP Photo/Paul Sancya)
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DETROIT (AP) — An investment banker specializing in turnarounds says Detroit was "operating on a razor's edge" and running out of cash weeks before it filed for bankruptcy protection in July.

Ken Buckfire was hired to lead a restructuring team poring over the city's books and looking for ways to raise cash. He says the city was delaying payments to vendors to conserve money while tax revenue flowed in unevenly.

Buckfire testified Thursday at a trial to determine if Detroit is eligible to be in bankruptcy court. The city must show it's broke and tried in good-faith to negotiate with creditors. Unions and pension funds say the city didn't hold genuine talks.

Buckfire says his firm, Miller Buckfire, first got involved before the governor in March appointed an emergency manager to run Detroit.

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