Puerto Rico Governor Alejandro Garcia Padilla will pay Christmas bonuses due to public employees as the commonwealth contemplates defaulting on bond payments at the start of the year, Bloomberg News reported yesterday. The governor, who won’t seek re-election when his term expires in January 2017, will begin paying about $120 million that workers were owed as of Dec. 20, according to an announcement posted Sunday on the administration’s website. The administration had said it wasn’t sure whether it had enough money to make the bonus payments, which economists say have a multiplier effect on the island’s struggling economy. Garcia Padilla also faces a $957 million interest payment on commonwealth and agency debt due Jan. 1, including $357 million on general-obligations. Puerto Rico’s constitution requires that officials must first pay general-obligation debt before other bills. Read more.
The December episode of "Eye on Bankruptcy" on Thursday was devoted to Puerto Rico, featuring remarks by Rep. Pedro Pierluisi, Judge Steven Rhodes and an analysis of the coming Supreme Court argument on whether the Recovery Act was pre-empted by the Bankruptcy Code.
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, 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.
