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FinanceBankruptcy

Supreme Court Accepts Puerto Rico Debt Restructuring Case

By
Claire Groden
Claire Groden
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By
Claire Groden
Claire Groden
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December 4, 2015, 4:40 PM ET
Puerto Rico Teeters On Edge Of Massive Default
SAN JUAN, PUERTO RICO - JULY 01: A for sale sign is seen hanging from a balcony next to a Puerto Rican flag in Old San Juan as the island's residents deal with the government's $72 billion debt on July 1, 2015 in San Juan, Puerto Rico. Governor of Puerto Rico Alejandro García Padilla said in a speech recently that the people of Puerto Rico will have to make sacrifices and share the responsibilities to help pull the island out of debt. (Photo by Joe Raedle/Getty Images)Photograph by Joe Raedle—Getty Images
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The U.S. Supreme Court agreed on Friday to weigh in on whether Puerto Rico can restructure its public utilities’ debt.

The U.S. territory is in around $72 billion in debt, which it says it can’t repay. The public utilities, meanwhile, are around $20 billion in debt. But lacking the rights of a state, Puerto Rico isn’t allowed to restructure public debts under the Bankruptcy Code, according to The New York Times.

Last year, the territory passed a law giving itself the authority that the Bankruptcy Code withheld so that the debt could still be restructured, but an appeals court shot down the law. The Supreme Court will now decide whether Puerto Rico has to authority to restructure those debts.

The Court is likely to take up the case in March, SCOTUS blog reported.

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By Claire Groden
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