After Debt: A Path Forward for Puerto Rico
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debt
U.S. territory
municipalities
David A. Skeel
Bankruptcy Law
Public Economics
Public Policy
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Related resources
A Puerto Rico Primer: Why the Debt Problem Is Our Problem (http://knowledge.wharton.upenn.edu/article/why-puerto-ricos-debt-problem-is-our-problem/)
After Debt: A Path Forward for Puerto Rico (http://publicpolicy.wharton.upenn.edu/issue-brief/v4n3.php)
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Abstract
This Issue Brief summarizes events surrounding the current debt crisis in Puerto Rico and presents a two-step plan for restructuring Puerto Rico’s debt and encouraging more effective governance. This plan draws extensively on the previous experiences of debt crises in municipalities on the U.S. mainland. Step one entails the creation of a financial control board (FCB) for Puerto Rico, monitored by the U.S. federal government but involving significant Puerto Rican representation. Step two would be for Congress either to craft a restructuring framework applicable to all of America’s territories, or to extend the existing bankruptcy laws in Chapter 9 of the Bankruptcy Code (with modifications) to Puerto Rico and its municipalities.