A lawyer for Puerto Rico's financial oversight panel on Monday said the bankrupt island's highway authority could run out of cash if it continues to pay all its debt, and signaled big repayment cuts for the authority's creditors, Reuters reported yesterday. Attorney Martin Bienenstock made the comments at a court hearing related to Puerto Rico's bankruptcy, at which a creditor of the Highway and Transportation Authority (HTA) sought to block the island's use of "clawbacks" — diverting toll revenue out of HTA's coffers. HTA bondholders have a lien on that revenue, and want to keep getting paid. But "once they take the money, we have no money to operate the highway authority," Bienenstock said yesterday in a Manhattan courtroom. U.S. District Judge Laura Taylor Swain scheduled a trial on the dispute for Aug. 8, in the Puerto Rican capital San Juan. Read more.
For more news and analysis of Puerto Rico's debt crisis, be sure to visit ABI's "Puerto Rico in Distress" webpage.
