U.S.|Judge Approves Deal to Resolve Puerto Rico Bankruptcy
The program restructures $33 cardinal successful indebtedness astir 5 years aft Puerto Rico became the archetypal U.S. authorities oregon territory to fundamentally state bankruptcy.
Jan. 18, 2022Updated 5:27 p.m. ET
MIAMI — Puerto Rico received support from a national justice connected Tuesday to permission bankruptcy nether the largest nationalist assemblage indebtedness restructuring woody successful the past of the United States, astir 5 years aft the financially strapped territory declared that it could not repay its creditors.
Since Puerto Rico entered bankruptcy, its economical situation has lone been further deepened by Hurricanes Irma and Maria, a bid of earthquakes and the coronavirus pandemic.
The restructuring program volition trim the largest information of the Puerto Rico government’s indebtedness — immoderate $33 cardinal — by astir 80 percent. The woody volition besides prevention the authorities much than $50 cardinal successful indebtedness payments.
“Today begins a caller section successful PR’s history,” the oversight committee that has overseen Puerto Rico’s finances since 2016 wrote connected Twitter connected Tuesday afternoon.
The unelected board, which was created by Congress, is not good loved successful Puerto Rico, wherever galore of the island’s much than 3 cardinal radical notation to it arsenic “la junta.” Critics interest that Puerto Rico volition not person capable wealth successful its wide money to marque adjacent the reduced indebtedness payments implicit the agelong run, yet forcing much achy economical austerity measures.
When the territory entered bankruptcy successful May 2017, it had much than $70 cardinal successful enslaved indebtedness and much than $50 cardinal successful unfunded pension obligations to nationalist workers. The bankruptcies of different nationalist entities, including the Puerto Rico Electric Power Authority, stay unresolved.
“The agreement, portion not perfect, is precise bully for Puerto Rico and protects our pensioners, assemblage and municipalities that service our people,” Gov. Pedro R. Pierluisi said successful a statement. “We inactive person a batch of enactment up of us.”