Joel R. Glucksman
Partner
201-896-7095 jglucksman@sh-law.comFirm Insights
Fiscal Matters Coming To A Head For Puerto Rico
Author: Joel R. Glucksman
Date: April 16, 2015
Key Contacts
Back
The New York Times’ Deal Book reports that Puerto Rico’s debt problems are reaching “a critical point.” According to the article, Puerto Rico cannot handle its existing debt load.
Moreover, while American cities and municipal entities may use Chapter 9 of the Bankruptcy Code, American states and territories may not. Therefore, Puerto Rico has no viable mechanism at present for resolving its debt problems in bankruptcy court. Joseph Rosenblum, the director of municipal credit research at AllianceBernstein states that Puerto Rico would seem to be running out of liquidity quickly.
Puerto Rico’s overall debt, on a pro-capita basis, is bigger than that of any state, according to the New York Times, and investors have been making increasingly more stringent demands before they will pour additional money into the island. This is in contrast to past practice, where Puerto Rico was able to sell as much debt as it needed to because all 50 American states made the interest on such bonds tax exempt. Moreover, there did not seem to be any difficulty with investors’ expectations that the debt would be repaid. Last summer, however, the Puerto Rican legislature passed a Recovery Act, which would have enabled Puerto Rico to restructure the debt of some of its public corporations. This shook the investor community, according to Deal Book. That statute was overturned in curt, although the issue is on appeal.
The issue is likely to come to a head soon, as the New York Times reports that Puerto Rico may need to borrow as much as $2.9 billion this spring, in order to continue to finance its existing debt load.
- Practices: Corporate Transactions & Business, Bankruptcy & Creditors' Rights
- Locations: Red Bank, NJ, New York City, Little Falls, NJ
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Related Posts
See all
Eviction Is Not Always the End: Understanding Post-Possession Rent Claims in New Jersey and New York
No. An eviction does not automatically end a tenant’s obligation to pay rent. Post-eviction rent claims are common because recovering possession resolves who has the right to occupy the premises, but it does not extinguish the tenant’s contractual obligations under the lease. Whether unpaid or future rent remains owed depends on three factors: the lease’s […]
Author: Donald M. Pepe
Company Dissolved? Legal and Financial Consequences to Expect
A company is dissolved; legally, it ceases to exist. Accordingly, dissolution results in significant legal and financial consequences. It is a process that must be properly managed to avoid continuing liability. The Corporate Dissolution Process Corporate dissolution is the legal process of formally closing a corporation, paying its debts and distributing the remaining assets. Most […]
Author: Jay McDaniel
The Legal Implications of Signing a Triple Net Lease
A triple net lease is a commercial lease in which the tenant pays the property’s real estate taxes, insurance, and maintenance costs, known as the three nets, in addition to base rent. They are most often used in freestanding retail and office buildings and in large single-tenant industrial properties, with terms that typically run 10 […]
Author: Donald M. Pepe
When to Settle and When to Fight: A Litigator's Framework
Every lawsuit comes with a cost, and knowing when to settle a lawsuit is one of the most consequential decisions a business owner will face. Experienced litigators understand how to minimize cost and obtain certainty for their clients. For many business owners, the decision is viewed almost entirely through a financial lens: What will it cost […]
Author: Sean M. Pena
When Does a Business Need a Corporate Attorney?
A corporate attorney advises businesses on formation, ownership, governance, contracts, transactions, compliance, disputes, and the legal risks that arise as a company grows. The role is not limited to filing documents or reviewing agreements. A corporate attorney helps a business understand when a commercial decision has legal consequences, how to structure that decision properly, and […]
Author: Scarinci Hollenbeck, LLC
A Whistleblower Just Filed a Complaint Against Your Company: Here's What to Do Now
Few situations create more uncertainty than learning that an employee has filed a whistleblower complaint. Questions arise immediately: Is the allegation legitimate? Should the employee be placed on leave? Do we need to notify our insurance carrier? Are we now prevented from disciplining the employee if there are unrelated ongoing work related issues? There is […]
Author: Sean M. Pena
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Sign up to get the latest from our attorneys!
Explore What Matters Most to You.
Consider subscribing to our Firm Insights mailing list by clicking the button below so you can keep up to date with the firm`s latest articles covering various legal topics.
Stay informed and inspired with the latest updates, insights, and events from Scarinci Hollenbeck. Our resource library provides valuable content across a range of categories to keep you connected and ahead of the curve.