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Detroit's broke; could bankruptcy lie ahead?

Corey Williams, Associated Press

FILE - This March 14, 2013 file photo shows the skyline of the city of Detroit. In a report released late Sunday, May 12, 2013, Kevyn Orr, the city’s state-appointed emergency manager, said Detroit is broke and faces a bleak future given the precarious financial path it's on. It was his first report on Detroit’s finances since taking the job in March. (AP Photo/Paul Sancya, File)

DETROIT (AP) -- The first report by Detroit's emergency manager declares that the city is broke and at risk of running completely out of money — a financial meltdown that could mean no paychecks for workers, no pension benefits and even deeper cuts in services.

If the city cannot avert disaster, the only remaining option appears to be bankruptcy, a threat that looms large over Kevyn Orr's urgent efforts to make deals with creditors and debt holders.

The 41-page report was filed with the state Treasurer's office Monday and shows a city flirting with insolvency.

Detroit area turnaround expert James McTevia says Orr may choose to go before a bankruptcy judge "when he gets his back against the wall and he can't meet payroll and he has to have court protection."