Detroit is projecting it will run out of cash next month unless the state of Michigan releases money due it from a debt sale, the city told its financial advisory board. The city's report to the board, created as part of a consent agreement Detroit approved in April, said that "absent the availability of escrow proceeds, the city will need to employ other working capital solutions to avoid liquidity crises."
Detroit faced a cash crisis this summer that led to warnings it could default on some bonds, as well as to subsequent downgrades that pounded the city's credit ratings deeper into the junk category.The cash crunch and a default were subsequently averted by the bond sale... In October, Moody's Investors Service said it was keeping Detroit on review for potentially another downgrade, citing in part the possible repeal of Michigan's 2011 emergency manager law by voters on November 6. Parts of that law, which was repealed by voters, were used to craft Detroit's consent agreement.