Popular Inc: Congress Tangled On Puerto Rico’s Appeal And Obama’s Aid Plan

White House has announced its backing for Puerto Rico to gain access to US states’ bankruptcy rights (Chapter 9 bankruptcy). But, the final decision to help Puerto Rico lies with the Congress.

The US states’ bankruptcy rights, if granted by the Congress to Puerto Rico, will only be able to cover one third of the island’s $72 billion total debt. The White House plan proposes a new reformation regime that goes beyond the tools available to US states. This will allow the island to access a special restructuring process which is court-administered. President Obama was keen to point out that the new bankruptcy rules will only be applicable on US territories……

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