Puerto Rico Veers Toward Bankruptcy
Sometimes you don’t want to be first. Gov. Ricardo Rosselló has announced he’ll solve Puerto Rico’s debt crisis by taking it to federal bankruptcy court, a first for any U.S. state or territory. While Puerto Rico isn’t eligible to use Chapter 9, as local governments do, it’s filing for bankruptcy-like restructuring of its $123 billion in debt and pension obligations under Title III of last year’s PROMESA law, which recognizes the territory’s partial sovereignty. If this works, some on-the-edge states like Illinois might take a similar route in the future.