Puerto Rico Declares Quasi-Bankruptcy

Puerto Rico moved to declare a type of bankruptcy on Wednesday, in a move to avoid lawsuits from its creditors over the government’s billions in public debt. The governor, Ricardo Rossello, had tried to get parties to come together to restructure its $73 billion in bond debt and $50 billion in unfunded pensions, but many Puerto Ricans resisted austerity efforts. As a territory, Puerto Rico is unable to declare Chapter 9 bankruptcy that can be used by local governments, so it will enter federal bankruptcy court based on a law that allows territorial governments to do so.