A federal control board that oversees Puerto Rico’s finances filed a long-awaited plan on Friday that it says would reduce the U.S. territory’s debt by more than 60 percent and pull the island out of bankruptcy, the Associated Press reported. The plan comes three years after U.S. Congress created the board and would reduce a total of $35 billion in liabilities to $12 billion, a move that some believe would help ease Puerto Rico’s financial crisis amid a 13-year recession. Confirmation of the plan by U.S. Judge Laura Taylor Swain, who is hearing Puerto Rico's bankruptcy cases, is expected in the first half of 2020, according to Natalie Jaresko, the board's executive director. If approved, the debt restructuring plan would impose an 8.5 percent in pension cuts for retirees that receive more than $1,200 a month, a move that Puerto Rico’s government has opposed. Puerto Rico’s public pension system currently faces more than $50 billion in unfunded pension benefits. The plan would reduce Puerto Rico’s annual debt service to under 9 percent, down from almost 30 percent prior to Congress approving a financial package that led to the creation of the board. But Puerto Rico faces "an uphill battle," according to James Spiotto, managing director of Chapman Strategic Advisors, who pointed to the proposal's relatively low support among creditors compared with plan of adjustment filings in previous high-profile municipal bankruptcies, Reuters reported.
