A federal stay barring Puerto Rico’s creditors from taking legal action against the commonwealth and most of its entities for nonpayment of debt expires on Tuesday, the Wall Street Journal reported yesterday. The stay was ordered under the Puerto Rico Oversight, Management and Economic Stability Act, or PROMESA, passed by Congress in June 2016. It was designed to give cash-strapped Puerto Rico time to come up with a viable long-term fiscal plan, and to work with creditors toward a voluntary debt restructuring, but both sides appear to be far apart. The expiration of the stay could allow Puerto Rico’s newly elected Gov. Ricardo Rosselló to seek bankruptcy protection for much of that debt, as provided for under PROMESA, but creditors won’t go down without a fight.
For more news and analysis of Puerto Rico's debt crisis, be sure to visit ABI's "Puerto Rico in Distress" webpage.
