Detroit on 'razor's edge' before bankruptcy

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Associated Press

Posted on October 24, 2013 at 10:32 AM

Updated Thursday, Oct 24 at 2:02 PM

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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