Detroit Analyst Faces Grilling In Bankruptcy Trial

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DETROIT (AP) -- A financial analyst who studied Detroit's books is returning to court for cross-examination in the city's bankruptcy trial.

Gaurav Malhotra of Ernst & Young was the first and only witness Wednesday. He says he warned officials last summer that Detroit was looking at a possible 10-year budget deficit of about $4 billion, due mainly to pensions and health care.

Judge Steven Rhodes repeatedly limited what Malhotra could say because the city isn't presenting him as an expert witness. The trial is being held to determine if Detroit is eligible to restructure itself under Chapter 9 of the bankruptcy law.

The judge must decide whether the city is broke and whether it negotiated in good faith with creditors before filing in July. Unions and pension funds are opposed.

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