Supreme Court rules against Puerto Rico in debt case
The Supreme Court says Puerto Rico can’t restructure the debt of its financially ailing public utilities to help overcome a decade-long economic crisis.
The 5-2 ruling Monday means the U.S. territory must wait for Congress to pass debt-relief legislation to help ease its fiscal woes.
The justices said federal bankruptcy law bars Puerto Rico from enacting its own law to restructure about $20 billion in debt.
Puerto Rico lawmakers passed the law in 2014 to help cash-strapped utilities meet obligations to bondholders and creditors. Puerto Rico argued that it could enact its own measures since the island is precluded from using bankruptcy law. But lower courts struck down the law.
The commonwealth is mired in recession and cannot pay $72 billion in public debt.
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