The U.S. Department of Justice said on Friday that it will intervene in Puerto Rico’s four-year bankruptcy case to defend a federal law that gave the island the ability to cut its obligations through the courts, Bloomberg News reported.
Puerto Rico in Distress
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After more than four years, Puerto Rico is set to emerge from its record bankruptcy in the early part of 2022. While it slashes tens of billions of dollars in debt and shakes off the stigma of default, the U.S.
Puerto Rico’s long history of failing to pay its pension obligations is expected to haunt the U.S. territory even after its bankruptcy ends, the Wall Street Journal reported. A proposed bankruptcy restructuring under consideration by a federal judge would end defined-benefit retirement programs covering tens of thousands of active teachers and judges in Puerto Rico.
The Financial Oversight and Management Board for Puerto Rico said it filed a lawsuit to stop the local government from offering public workers billions in new retirement benefits that it says will undermine the island’s long-sought plan to restructure its debt, Bloomberg News reported.
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The Financial Oversight and Management Board for Puerto Rico was created under the Puerto Rico Oversight, Management and Economic Stability Act of 2016. The Board consists of seven members appointed by the President of the United States and one ex officio member designated by the Governor of Puerto Rico. Access information on the Board, documents, videos of meetings, calendar of events and live webcasts by clicking here.