Puerto Rico announces historic debt restructuring in court

FILE PHOTO - People carry a large Puerto Rican flag as they protest looming austerity measures amid an economic crisis and demand an audit on the island's debt to identify those responsible, in San Juan, Puerto Rico, Monday, May 1, 2017. Puerto Rico is preparing to cut public employee benefits, increase tax revenue, hike water rates and privatize government operations, among other things. (AP Photo/Danica Coto)

SAN JUAN, Puerto Rico (AP) – Puerto Rico’s governor has announced a historic restructuring of a portion of the U.S. territory’s $70B debt through courts after negotiations with bondholders failed.

Gov. Ricardo Rossello said Wednesday that a federal control board overseeing the island’s finances has agreed with his request to put the debts before a court. It’s a process similar to bankruptcy.

The island was hit with several lawsuits on Tuesday after a freeze on litigation that protected the government from lawsuits by creditors expired. The restructuring through courts will once again protect Puerto Rico from such lawsuits.


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