Puerto Rico’s financial restructuring is ricocheting in a new direction after a federal court ruling threatened to leave the U.S. territory without functioning fiscal supervisors for the first time since its default on its debt, WSJ Pro Bankruptcy reported. The U.S. Court of Appeals for the First Circuit said last week that members of Puerto Rico’s oversight board must be confirmed by the Senate, a potentially game-changing decision that leaves debt restructuring talks and planned economic reforms on shaky ground. If the ruling becomes final, Puerto Rico would once again become a problem for Washington to solve. President Trump and the U.S. Senate would have 90 days to confirm the existing board members or new nominees. But with hundreds of Trump administration executive-branch nominations stalled in the Senate, it is doubtful that any board nominees put forth by the White House could be confirmed in time, according to lawyers, consultants and other experts following the matter. The board could lose its constitutional authority to act if the 90-day deadline comes and goes, creating a power vacuum and setting off a new period of uncertainty for Puerto Rico’s residents, businesses and bondholders.
