The U.S. Supreme Court may announce as soon as today whether it will hear an appeal by Puerto Rico to reinstate a law that would allow some island agencies to restructure their debts, Bloomberg News reported. The Court is scheduled to review Puerto Rico’s appeal during a private conference today, when it often issues a list of new cases. The disputed law would affect $22 billion of Puerto Rico’s $70 billion in debt. That includes $8.2 billion owed by the Puerto Rico Electric Power Authority, known as Prepa, which is negotiating with its creditors and would gain new leverage from a ruling upholding the law. The case centers on the power of the Puerto Rican government to fill what it says is a gap in federal bankruptcy law, which bars filings by the commonwealth’s agencies and municipalities. If the Supreme Court agrees to hear the case, it may hear arguments in March. The high court would rule by late June. Read more.
In related news, 10 Puerto Rico officials and local business people were indicted by a U.S. grand jury in connection with bribes made to win contracts from the island’s government, Bloomberg News reported yesterday. The charges were announced yesterday by U.S. Attorney Rosa Emilia Rodríguez-Vélez in Puerto Rico. They center on Anaudi Hernández Pérez, a political fund-raiser who prosecutors said exploited his ties to Governor Alejandro Garcia Padilla’s administration to recommend job candidates who went on to steer government contracts to his companies. Hernández Pérez’s co-conspirators include officials with the Puerto Rico Aqueduct and Sewer Authority, the workforce development agency and the island’s House of Representatives. Public officials were also treated to expensive meals and lavished with gifts including concert tickets, purses and help with their debts, according to prosecutors. Read more.
Join experts in San Juan to discuss Puerto Rico’s economic distress and other important cross-border insolvency topics at ABI’s Caribbean Insolvency Symposium on Feb. 4-6, 2016. Click here to register.
For more news and analysis of Puerto Rico’s debt crisis, be sure to visit ABI’s “Puerto Rico in Distress” webpage.
