Darren Soto glad Puerto Rico will seek Bankruptcy-like measure under PROMESA

May 06, 2017, 01:52
Darren Soto glad Puerto Rico will seek Bankruptcy-like measure under PROMESA

Puerto Rico's restructuring will be the biggest in municipal-bond market history, vastly larger than Detroit's $18 billion record bankruptcy, and will mark the first time a state-level issuer has had debt written off in federal court.

Rossello said he is requesting that the island's financial oversight board initiate a Title III, a day after several major creditors sued his government over defaults on the island's $70 billion in bonds.

Unlike a typical bankruptcy, after filing in the District Court for the District of Puerto Rico, PROMESA requires the Chief Justice of the United States Supreme Court to appoint the district court that will oversee the Title III proceeding.

Puerto Rico's labor participation rate is only about two-thirds that of the US mainland. Prior to enactment of the legislation, Puerto Rico would have been barred from any bankruptcy filing as a U.S. territory.

More news: NSA Hasn't Stopped Surveillance: 151 Million Phone Records Collected in 2016

Rossello said negotiations with bondholders had failed, forcing the government to seek relief through a bankruptcy-like move available under Title III of a federal law called Promesa. As this case moves forward, it will represent the largest bankruptcy ever experienced by the USA municipal bond market, estimated to be worth $3.8 trillion. "We remain committed to holding good-faith negotiations to reach agreements with our creditors", he said, adding that he hoped the court proceedings would "accelerate the process". But the expiration Monday night of the stay against litigation provided by PROMESA makes the government vulnerable to lawsuits by its creditors.

The May Day strike closed shops, while protesters blocked roads in the capital San Juan to the University of Puerto Rico and the city's worldwide airport. The cost of fully servicing that much debt would be about $3.5 million a year, NYT.

Today, Title III may be all that stands between order and the kind of economic chaos suffered by the people of Germany during the Weimar period following World War I. Understandably, investors who are affected by the crisis are greatly concerned about what will happen next.

They cite as evidence a law signed by Rossello on Saturday that would give the government authority to redirect sales tax revenue into Puerto Rico's general fund as part of a debt restructuring.

More news: High Court rejects government bid to delay air quality plans

FILE - In this October 29, 2016, file photo, Ricardo Rossello, then the Puerto Rican gubernatorial candidate, speaks during a forum, in San Juan, Puerto Rico. The restructuring process through the court system will once again protect Puerto Rico from lawsuits.

According to the US Census Bureau, 46 percent of Puerto Rico's residents live below federal poverty levels, compared to the national average of 14 percent and 36 percent in Detroit.

Puerto Rico's situation is not dissimilar to Detroit's, which was the culmination of years of economic stagnation and bad policy.

Negotiations revolved around a board-approved fiscal plan that allocates about $787 million a year to creditors for the next decade, less than a quarter of what they are owed. The judge will be in charge of coming up with an orderly restructuring plan.

More news: Chernova loses Beijing bronze for doping

YOU MIGHT ALSO LIKE
  • 49ers had interest for No. 2 pick before trading with Bears

    49ers had interest for No. 2 pick before trading with Bears

    Hopefully, these rookies will immediately have a significant impact as the team looks to end a longtime slump. His 40 time (4.79) affected his draft stock but his athleticism makes him a player that intrigues the Browns.

    Trump adviser to leave the White House

    The Times report said that Gorka will "likely" be moved to a role outside the White House but still be part of the administration. A counter-terrorism adviser to President Donald Trump will be leaving the White House, according to an official.
    Will Smith & DJ Jazzy Jeff announce 2017 comeback tour for this summer

    Will Smith & DJ Jazzy Jeff announce 2017 comeback tour for this summer

    Michael Ochs Archives/Getty ImagesTime to sit back and unwind this summer with Will Smith and DJ Jazzy Jeff. The duo have sold more than 5.5 million albums in America.
  • Browns invite even more quarterback questions in 2017

    Browns invite even more quarterback questions in 2017

    Just based on talent alone, Cook was worth a first round pick and arguably the best running back in the draft . That's the fewest players with 10-plus sacks in a season for one franchise during that span.
    Predators' Fiala out of playoffs after breaking leg

    Predators' Fiala out of playoffs after breaking leg

    On the power play in the first, Subban reared back and fired his signature heavy slapshot from the edge of the circle. "Like you said, it's disappointing to be up halfway through the third there, but you have to stay out of the box".
    Confused Powermat CEO Says Apple Announced iPhone 8 Wireless Charging

    Confused Powermat CEO Says Apple Announced iPhone 8 Wireless Charging

    Ridding the iPhone 8 of the Home button will enable the display to extend to the outer limits of the body of the device. Micro-LED displays should be smaller as an alternative to OLED screens .
  • US general in Afghanistan suggests Russia arming the Taliban

    US general in Afghanistan suggests Russia arming the Taliban

    Trump as president was that they thought he would take a businessman's approach to America's portfolio of engagements overseas. He acknowledged that 2017 was going to be another tough year for Afghan security forces and the global troops stationed there.

    Predators beat Blues 4-3 in Game 1 of second-round series

    This is up to us to make sure that we find a way". "We knew it was going to be a tough game, a physical game". And obviously learning about the game yourself and the feel of the game and the opponent you're playing.
    Dejected Bayern out to secure last title on offer

    Dejected Bayern out to secure last title on offer

    Bayern pressed frenetically for the leveller but neither Robben nor Lewandowski were able to force Dortmund into overtime. Dembele's effort broke the 2-2 deadlock and prevented the German Cup semifinal from going into extra time .
  • Senator: Trump won't let NKorea build missile to reach US

    Graham, a defense hawk who dined with Trump on Monday night, said North Korea should not underestimate the president's resolve. But with increasingly provocative statements and actions coming from North Korea, the emphasis is on military deterrence.
    Logano gambles, wins at Richmond

    Logano gambles, wins at Richmond

    Just three laps later, the left-front tire on Jones' auto failed, throwing his No. 77 Furniture Row Racing Toyota into the wall. This time , Kyle Larson and Ricky Stenhouse Jr . were on the front row as a total of five cars stayed out.
    Hannity defends Fox News president Shine amid report

    Hannity defends Fox News president Shine amid report

    The host then continued to discuss the story, even going as far as to claim Shine was being sabotaged by someone within Fox News. Fox News continues to be the most-watched cable news network and is typically among the leaders in all of cable, not just news.
popular