Puerto Rico’s Debt Recovery Act – Desperate Times Need Desperate Measures

Puerto Rico enacted the Public Corporations Debt Enforcement and Recovery Act on June 30. The legislation was pushed through without public discussion or debate and presented on the last day on which the legislature could consider such a bill.

The stated aim of the bill is to create a clear legislative framework to assist financially stressed public corporations overcome their problems “through an orderly, statutory process” that allows them to handle their debts fairly and equitably, while ensuring the continuity of essential services to citizens and infrastructure upgrades.

At a news conference, PR Treasury Secretary Melba Acosta-Febo and Government Development Bank Chairman David H Chafey emphasized that the legislation was not a bankruptcy law and would not apply to the...