9:30 AM --

Day two of the Detroit bankruptcy eligibility trial the morning session started with some important housekeeping.

Read: Day 1 -- Rod Meloni inside bankruptcy trial

Gov. Rick Snyder will testify starting at 1 p.m. on Monday.

Related story: Snyder will testify at bankruptcy trial

There was some back and forth over how this would work, but in the end, the judge wanted to make certain the governor only had to make one appearance at the trial. So, instead of court ending at 3 p.m. on Monday, it will run until 5 p.m.

9:40 AM --

Continuing on the stand this morning is Ernst and Young's Gaurav Malhotra. The financial analyst is being cross examined by American Federation of State County and Municipal employees attorney Jack Sherwood.

Sherwood appears to be setting up his case that the city did not need emergency management. His line of questioning surrounds asking Malhotra about the city’s financial condition.

Malhotra has been with the city for nearly two years, watching the city’s financial condition.

Malhotra testified he had a lot to do with Mayor Dave Bing’s restructuring plan but when emergency manager Kevyn Orr came to the city, he had less responsibility.

In fact, he said, he had little to no impact on Kevyn Orr’s restructuring plan that was given to union leadership and bondholders last June.

Read: City of Detroit Proposal for Creditors

Malhotra said the city was always trying to figure out ways to deal with its cash crunch. He was deeply concerned that the city was not managing its cash flow and debt crisis at all well.

He testified, “I told them there using deferrals and not actual cost savings” as their methodology of dealing with their difficult finances.

Sherwood is now asking Malhotra about the possibility of selling assets to deal with debts. He may have come up with the line of the day: “cash is cash” he answered Sherwood when asked about what happens when you sell an asset and get money for it to pay debts.

Sherwood is asking Malhotra about his relationship with Miller Buckfire, one of the financial consultants Kevyn Orr and the governor brought into the city.

Sherwood wanted to know whether Miller Buckfire was concerned that “if the city monetized assets that would have a negative impact to prove that it was eligible for Chapter 9 Bankruptcy?”

Malhotra said, “I have no recollection.”

“Did Miller Buckfire in your presence express any concerns about selling assets in 2013?"

“I do not recall.” 

Sherwood: You were at the counsel interview meeting at the airport on June 29th, when Jones Day gave its presentation?

Yes I was.

Were you interested in statements they made about liquidity and cash flow yes?

Malhotra: Yes.