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Supreme Court Rejects Puerto Rico Law in Debt Restructuring Case

By ADAM LIPTAK and MARY WILLIAMS WALSHJUNE 13, 2016

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In dissent, Justice Sonia Sotomayor, joined by Justice Ruth Bader Ginsburg, said the majority’s approach was too mechanical and failed to take into account the purpose of the bankruptcy law and the impact of its decision. The Recovery Act, she wrote, “is the only existing legal option for Puerto Rico to restructure debts that could cripple its citizens.”

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Multimedia Feature
How Puerto Rico Debt Is Grappling With a Debt Crisis

The new debt relief law is stirring colonial resentment, as Puerto Rican officials denounced the “junta”
— or federal control board — that will soon direct this island’s failing governance and finances.
OPEN Multimedia Feature ..
https://www.nytimes.com/interactive/2016/business/dealbook/puerto-rico-debt-crisis-explained.html
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“The Commonwealth of Puerto Rico and its municipalities are in the middle of a fiscal crisis,” she wrote. “The combined debt of Puerto Rico’s three main public utilities exceeds $20 billion. These utilities provide power, water, sewer and transportation to residents of the island.”

“With rising interest rates and limited access to capital markets, their debts are proving unserviceable. Soon, Puerto Rico and the utilities contend, they will be unable to pay for things like fuel to generate electricity, which will lead to rolling blackouts,” Justice Sotomayor added. “Other vital public services will be imperiled, including the utilities’ ability to provide safe drinking water, maintain roads and operate public transportation.”

The majority’s approach ignores those realities, she wrote, “rejects contextual analysis in favor of a syllogism” and leaves Puerto Rico “powerless and with no legal process to help” its citizens

https://www.nytimes.com/2016/06/14/us/politics/supreme-court-rules-against-puerto-rico-in-debt-restructuring-case.html?mcubz=0&_r=0