U.S. commonwealth Puerto Rico is planning to seek a court-supervised restructuring of some $73 billion in outstanding debt, according to the Wall Street Journal. The cash-strapped island’s governor, Ricardo Rosselló, will petition the commonwealth’s oversight board to enact rule Title III–a court-supervised bankruptcy-like restructuring process that would allow it to rework billions in debt owed to creditors, including hedge funds and banks. Puerto Rico is not technically a municipality and therefore isn’t covered by U.S. bankruptcy law under Chapter 9, but a federal oversight board was created by a bill passed in Congress under President Barack Obama last June that grants the commonwealth bankruptcy-like protections. The move follows negotiations with Puerto Rico’s obligations that have so far failed to reach an agreement. Puerto Rico’s efforts to retool its debtload have been a longstanding problem for the island.
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