Detroit delayed vendor payments
DETROIT — Short of cash, Detroit was delaying payments to vendors and “operating on a razor's edge” for weeks before it filed for bankruptcy protection, the head of the city's turnaround team testified on Thursday.
Ken Buckfire, a Wall Street investment banker and Detroit-area native, gave the most detailed testimony so far on the second day of a trial that will determine whether the city can stay in bankruptcy court and eventually unsaddle $18 billion in debt.
Detroit must show it's broke and tried in good faith to negotiate with creditors. Unions and pension funds with much money at stake claim the city did not hold genuine talks; therefore, they argue, the case should be thrown out.
Buckfire's firm, Miller Buckfire, got involved in Detroit's finances before the bankruptcy. He arrived in 2012 as the state of Michigan signed an agreement with the city to make certain changes in exchange for financial support. The deal fell apart and eventually led to the appointment of an emergency manager in March.
Buckfire said many city assets were considered for possible sale, but none were viable.
By spring, there were estimates that Detroit soon would be down to just $7 million, a small vein of cash in an annual budget of more than $1 billion, while payments to vendors were repeatedly delayed, Buckfire said.
Show commenting policy
TribLive commenting policy
You are solely responsible for your comments and by using TribLive.com you agree to our Terms of Service.
We moderate comments. Our goal is to provide substantive commentary for a general readership. By screening submissions, we provide a space where readers can share intelligent and informed commentary that enhances the quality of our news and information.
While most comments will be posted if they are on-topic and not abusive, moderating decisions are subjective. We will make them as carefully and consistently as we can. Because of the volume of reader comments, we cannot review individual moderation decisions with readers.
We value thoughtful comments representing a range of views that make their point quickly and politely. We make an effort to protect discussions from repeated comments either by the same reader or different readers.
We follow the same standards for taste as the daily newspaper. A few things we won't tolerate: personal attacks, obscenity, vulgarity, profanity (including expletives and letters followed by dashes), commercial promotion, impersonations, incoherence, proselytizing and SHOUTING. Don't include URLs to Web sites.
We do not edit comments. They are either approved or deleted. We reserve the right to edit a comment that is quoted or excerpted in an article. In this case, we may fix spelling and punctuation.
We welcome strong opinions and criticism of our work, but we don't want comments to become bogged down with discussions of our policies and we will moderate accordingly.
We appreciate it when readers and people quoted in articles or blog posts point out errors of fact or emphasis and will investigate all assertions. But these suggestions should be sent via e-mail. To avoid distracting other readers, we won't publish comments that suggest a correction. Instead, corrections will be made in a blog post or in an article.
- Law enforcement, intelligence agencies want to ‘like’ you on social media
- Mountaineer workers fear smoking ban will harm ‘livelihood’
- Radar captures mayfly swarm on Mississippi
- Can Georgia GOP ‘outsider’ Perdue best Democrats’ Nunn?
- Biden decries voting restrictions in NAACP address
- House panel votes to sue Obama over health law implementation
- House waves off subpoenas from SEC in insider-trading probe
- To fight crime, Chicago tries wiping away arrests
- Fire season expected to accelerate
- After 40 years, Wyo. fossil trove to get another look
- Tornado slams Virginia campground, killing 2