Judge signs plan in Puerto Rico debt restructuring
Puerto Rico's nearly five-year bankruptcy battle was resolved Tuesday after a federal judge signed a plan that slashes the U.S. territory's public debt load as part of a restructuring and allows the government to start repaying creditors.
The plan was approved after the judge held heated hearings in recent months and as the island struggles to recover from deadly hurricanes, earthquakes and a pandemic that deepened its economic crisis.
“Today begins a new chapter in PR's history,” tweeted a federal control board that was appointed to oversee Puerto Rico's finances and had been working with the judge on the plan.
The board said that the plan signed by federal judge Laura Taylor-Swain cuts Puerto Rico's public debt by 80% and saves the government more than $50 billion in debt service payments. Puerto Rico's government declared in 2015 that it could not afford to pay its more than $70 billion public debt load. It then filed for the largest municipal bankruptcy in U.S. history in 2017. The government had accumulated the debt through decades of mismanagement, corruption and excessive borrowing.
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