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2017-05-03 12:06:03
Puerto Rico Declares a Form of Bankruptcy

The governor of Puerto Rico, Ricardo Rosselló, said he would move the island’s debt crisis into federal bankruptcy court, making it the largest government to seek refuge from its creditors in United States history.

Puerto Rico has roughly $73 billion of bond debt, and nearly $50 billion of unfunded pension obligations to restructure.

The case will not be formally called bankruptcy, since Puerto Rico is barred from using Chapter 9, the usual chapter used by insolvent local governments. It will instead petition for relief under a new federal law for insolvent territorial governments, called Promesa.