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Commonwealth of Puerto Rico Bankruptcy Filing Initiated

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The Commonwealth of Puerto Rico (a/k/a Government of Puerto Rico) filed a Title III Petition with the U.S. District Court in the District of Puerto Rico. Title III of the Puerto Rico Oversight, Management, and Economic Stability Act (PROMESA) is a specific statutory vehicle that allows Puerto Rico and other U.S. territories to restructure their debt. The Commonwealth is represented by Martin J. Bienenstock of Proskauer Rose and Hermann D. Bauer-Alvarez of O’Neill & Borges.

According to the Statement of the Oversight Board filed with the Court, “…Congress recognizes the crisis in the Commonwealth and its instrumentalities, and explains the fiscal emergency that renders the Commonwealth unable to provide its citizens effective services, while suffering the outmigration of residents and businesses. Congress points to lack of financial transparency, excessive borrowing, management inefficiencies, and a severe economic decline as having created the crisis….Negative economic growth has persisted for nine of the last ten years along with population diminution highlighted by exiting young doctors and other professionals.”

Court-filed documents further explain, ” In light of the expiration of the PROMESA stay, and because consensual negotiations seemed to reach an impasse, the Oversight Board and the Commonwealth decided the best path forward was to file a Title III case to protect Puerto Rico and its citizens. The Oversight Board and the Commonwealth intend to continue pursuing consensual negotiations under the protection of the Title III automatic stay, and remain hopeful that continued negotiations (including through mediation) will lead to consensual resolutions such that Puerto Rico will once again be able to experience economic and social prosperity after this difficult process is resolved.”

Read more Puerto Rico bankruptcy news.

The post Commonwealth of Puerto Rico Bankruptcy Filing Initiated appeared first on Daily Bankrupt Company Updates | Bankrupt Company News.


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