Puerto Rico Declares a Form of Bankruptcy

The New York Times ^ | 5/03/2017 | Mary Williams Walsh

[cll]

The governor of Puerto Rico, Ricardo Rosselló, said he would move the island’s debt crisis into federal bankruptcy court, making it the largest government to seek refuge from its creditors in United States history.

Puerto Rico has roughly $73 billion of bond debt, and nearly $50 billion of unfunded pension obligations to restructure.

The case will not be formally called bankruptcy, since Puerto Rico is barred from using Chapter 9, the usual chapter used by insolvent local governments. It will instead petition for relief under a new federal law for insolvent territorial governments, called Promesa.

[cll]

The Federal PROMESA Act = Puerto Rico Oversight, Management and Economic Stability Act. Not a bail out, it is a board empowered by Congress to supervise the territory finances.

[cll]

Puerto Rico Ping! Please Freepmail me if you want on or off the list.

[Mouton]

The budget deal involves the feds to infuse a ton of money into their medicaid program. IOW, free money goes offshore.

[I want the USA back]

We get to pay for that.
Note: PR produces almost nothing. If you don’t produce, you don’t get money. Without money you are poor. Begging for money from someone else doesn’t solve the problem.

[RinaseaofDs]

Not a bail out.

OK.

[Lurkinanloomin]

Statehood is coming.
The establishment has already decided for us.
It was Eric Cantor’s vote for the next referendum being only two choices, statehood or independence that made me start campaigning against him in 2012.

[vette6387]

“Note: PR produces almost nothing.”

Well, I’d say that they do produce a goodly batch of indigents who legally immigrate to places like New York City where they get welfare and form criminal gangs. we would be better of to cut PR loose and just pay them for the military installations we have there. It would be far cheaper. And make them all non-citizens so they can’t come here legally.

[momincombatboots]

Yep.. that’s suffering alright! Is this union pension bailout? Had enough of those to last a lifetime.

[MeneMeneTekelUpharsin]

Corruption and identity theft are trademarks of Puerto Rico in a huge way.

[ctdonath2]

Baffles me that such desirable locations _don’t_ produce more. Farming etc may be difficult there, but Silicon Valley type “thinking jobs” should be great. Set up a seriously fast internet service, entice remote & telecommute workers to move there. SF & LA & NYC & Seattle are overcrowded, why not relocate knowledge workers (who create big $ with little more than a notebook & wifi) to somewhere with under-used real estate akin to what attracted them to oceanfront digs in the first place?

[cll]

We’re doing that:

https://www.the2022actsociety.org/

[RinaseaofDs]

Under legislation passed by Congress over the summer, the members of the board were chosen by Obama from lists provided by congressional leaders — three from Democratic leaders’ list and four from Republicans’. The board members will not be paid, and they had to be vetted to make sure they have no conflicts of interest. The governor of Puerto Rico also sits on the board as an ex-officio member. The members from the Democratic list include Arthur J. Gonzalez, a senior fellow at New York University law school and former chief judge of the United States Bankruptcy Court for the southern district of New York. Gonzalez is a former New York City school teacher who later graduated from Fordham University law school. As chief bankruptcy judge, he presided over the reorganization of corporate giants such as Enron, WorldCom and Chrysler. Jose Ramon Gonzalez, also from the Democratic list, is the chief executive of the Federal Home Loan Bank of New York. Earlier, he was the chief executive of the Puerto Rico subsidiary of Santander Bank, the leading Spanish bank. He also served as president of the Puerto Rico Government Development Bank, a key institution that has already defaulted on some of its debt obligations. He started his career at Credit Suisse First Boston. Ana J. Matosantos, a budget consultant at the Public Policy Institute of California, served from 2009 to 2013 as director of California’s Department of Finance. She has served in a variety of other legislative areas for the state of California. The Republican list included Carlos Garcia, the chief executive of a private equity firm called BayBoston Managers. Garcia also worked at Santander Bank’s Puerto Rico unit, and was president and chief operating officer there from 1997 to 2008. In addition, Garcia ran the Government Development Bank and chaired a fiscal restructuring board from 2009 to 2011 that eliminated most of what had been a $3.3 billion government deficit. Also named were: • Jose R. Carrion, an executive at an insurance brokerage firm Hub International, who has served as a trustee of bankruptcy. • Andrew G. Biggs, a resident scholar at the AEI, where he studies Social Security reform, state and local government pensions, and public sector pay and benefits. • David Skeel, the S. Samuel Arsht professor of corporate law at the University of Pennsylvania. When not writing about bankruptcy and corporate law, Skeel also writes on sovereign debt, Christianity and law, and poetry and the law.

[Kay Ludlow]

and, there is no more story length at the NYT. Big space for small stories, small place for Big stories. I think this is a BIG STORY for US Taxpayers, but NYT doesn't...

What is the ‘new Promesa’ anyway? A recent Promise bill to bail them out???

[RinaseaofDs]

Under legislation passed by Congress over the summer, the members of the board were chosen by Obama from lists provided by congressional leaders — three from Democratic leaders’ list and four from Republicans’. The board members will not be paid, and they had to be vetted to make sure they have no conflicts of interest. The governor of Puerto Rico also sits on the board as an ex-officio member. The members from the Democratic list include Arthur J. Gonzalez, a senior fellow at New York University law school and former chief judge of the United States Bankruptcy Court for the southern district of New York. Gonzalez is a former New York City school teacher who later graduated from Fordham University law school. As chief bankruptcy judge, he presided over the reorganization of corporate giants such as Enron, WorldCom and Chrysler. Jose Ramon Gonzalez, also from the Democratic list, is the chief executive of the Federal Home Loan Bank of New York. Earlier, he was the chief executive of the Puerto Rico subsidiary of Santander Bank, the leading Spanish bank. He also served as president of the Puerto Rico Government Development Bank, a key institution that has already defaulted on some of its debt obligations. He started his career at Credit Suisse First Boston. Ana J. Matosantos, a budget consultant at the Public Policy Institute of California, served from 2009 to 2013 as director of California’s Department of Finance. She has served in a variety of other legislative areas for the state of California. The Republican list included Carlos Garcia, the chief executive of a private equity firm called BayBoston Managers. Garcia also worked at Santander Bank’s Puerto Rico unit, and was president and chief operating officer there from 1997 to 2008. In addition, Garcia ran the Government Development Bank and chaired a fiscal restructuring board from 2009 to 2011 that eliminated most of what had been a $3.3 billion government deficit. Also named were: • Jose R. Carrion, an executive at an insurance brokerage firm Hub International, who has served as a trustee of bankruptcy. • Andrew G. Biggs, a resident scholar at the AEI, where he studies Social Security reform, state and local government pensions, and public sector pay and benefits. •  David Skeel, the S. Samuel Arsht professor of corporate law at the University of Pennsylvania. When not writing about bankruptcy and corporate law, Skeel also writes on sovereign debt, Christianity and law, and poetry and the law.

[RinaseaofDs]

Sorry. Tried adding some formatting and it didn’t take.

I know its a big block of text, but it’s the six members of the board. You’ll love who made the list.

[cll]

This just happened.

PROMESA is the acronym for the Puerto Rico Oversight, Management and Economic Stability Act, which Congress enacted to establish a board to supervise the island government finances and return them to fiscal sanity.

More info here:

https://juntasupervision.pr.gov/index.php/en/home/

[Flavious_Maximus]

“$50 billion of unfunded pension obligations”

Right there is the problem. For years and years, government employees (i.e. unions) kept raiding the treasury at the expense of common taxpayers. Now it’s time to pay the piper and they have no money to pay for those outrageously generous pension schemes.

Give them nothing. Let them starve. All of them.

[Capt. Tom]

Statehood is coming.
The establishment has already decided for us.

What do you think the two new senators would be; Socialists (Dems) or Republicans? - Tom

[blueunicorn6]

The government of Puerto Rico has been running a Ponzi Scheme for years.

Confiscate all of the stolen assets from the present and former Puerto Rican politicians and then we can talk about what else to do.

[drop 50 and fire for effect]

PR is just the canary in the coal mine, California and Illinois are hot on their heels. Both of those problems will dwarf what we see in PR.

There is another thread on California that nearly mirrors the story in PR.

http://www.freerepublic.com/focus/f-news/3549682/posts