DAY 3: Trial to determine Detroit's eligibility for bankruptcy

DETROIT (WXYZ) - Detroit consultants who have testified about dire finances, city departments that don't function at basic levels and restructuring will have their testimony entered in the eligibility trial in Detroit's bankruptcy even though city attorneys did not qualify them as expert witnesses. 

Detroit's bankruptcy eligibility trial is now in day three. 

The question of expert witnesses was first raised by Judge Steven Rhodes on Thursday and Friday morning.

Attorneys for unions challenging Detroit in the eligibility trial moved to have the testimony stricken from the record from Ken Buckfire an investment banker with Miller Buckfire and Gaurav Malhotra - a financial analyst with Ernst and Young. 

A city attorney, Geoffrey Stewart from Jones Day argued that the consultants began working in Detroit operations before bankruptcy and their testimony as lay witnesses should not be excluded. But UAW attorney Peter DiChiara argued to the judge Friday morning that without the expert witness designation, Buckfire is no more qualified to answer these questions than the taxi driver who brought him to court. 

Judge Rhodes said a taxicab driver would not be allowed to testify, but the two consultants have extensive personal knowledge of the facts and circumstances that led to the filing of the bankruptcy case and denied the motion to have their testimony tossed out.

Orr and the city are accused of not negotiating in good faith with its creditors, especially the 20,000 Detroit retirees facing hits to their health care and pensions.

On Thursday, three city consultants testified that when they came in last year, many city departments couldn't perform basic functions.

The only definite revenue stream was from casino tax, and even that was threatened by Wall Street litigation, swaps or loans to cover employee pensions.

That's why the city's creditors want governor Rick Snyder to testify, asking if he ignored the state's constitution that protects pensions against cuts.

Police Chief James Craig also testified in court.

 

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