The Supreme Court ruled Monday that Puerto Rico cannot adopt its own legislation to restructure its crushing debt burden because of a 1984 federal bankruptcy provision that bars the commonwealth from using Chapter 9 of the bankruptcy law.
The decision leaves any rescue plan for Puerto Rico in the hands of Congress. The House and the Treasury Department have been debating ways to help the territory, which faces certain default on a portion of about $2 billion in payments due July 1. The default, one of many in recent months, would hit general obligation bonds, considered the safest kind of bond.
BREAKING: Supreme Court says Puerto Rico can’t restructure debt of financially ailing public utilities to deal with fiscal crisis.
— The Associated Press (@AP) June 13, 2016