U.S. Bankruptcy Judge Steven Rhodes heard opening arguments and testimony from one witness during the first day of a trial that will determine whether Detroit is eligible for Chapter 9 bankruptcy relief.
City lawyers argued bankruptcy was the only solution to fix $18 billion in debt and a situation in which residents were deprived of basic services and bills went unpaid.
The trial continues at 9 a.m. Thursday in U.S. District Court with financial consultant Gaurav Malhotra testifying about his analysis of the city’s liquidity and budget forecasts. Creditors will have a chance to cross-examine the Ernst & Young principal.
The trial is expected to last until Tuesday, at least. Gov. Rick Snyder is expected to testify Monday.