DAY 2: Trial to determine Detroit's eligibility for bankruptcy

DETROIT (WXYZ) - A critical phase of Detroit in bankruptcy is continues with day two Thursday downtown in federal court.

The eligibility trial began Wednesday at 9:00 a.m. as protesters gathered outside the court building.

The city is attempting to convince bankruptcy Judge Steven Rhodes the only way to out of it's $18 billion in debt is to restructure through bankruptcy. 

Objectors will try to make the case that city officials did not negotiate in good faith with creditors before bankruptcy. They will also try to make the case that Governor Rick Snyder and the Emergency Manager were not authorized to go into bankruptcy because Michigan Emergency Manager Law is flawed and the Michigan Constitution protects public employee pensions against cuts. 

The under-funding of pensions has been set at $3.5 billion. 20,000 Detroit retirees face some reductions in their pensions in bankruptcy. 

The eligibility trial is scheduled to run over several days. 

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