Democratic presidential front-runner Hillary Rodham Clinton said Tuesday said Puerto Rico deserved a “fair shot” at using U.S. bankruptcy laws to restructure some $72 billion in debt.
“Congress and the Obama administration need to partner with Puerto Rico by providing real support and tools so that Puerto Rico can do the hard work it will take to get on a path toward stability and prosperity,” Mrs. Clinton said in a statement first obtained by Reuters.
“As a first step, Congress should provide Puerto Rico the same authority that states already have to enable severely distressed government entities, including municipalities and public corporations, to restructure their debts under Chapter 9 of the Bankruptcy Code,” Clinton added.
The Puerto Rican debt crisis has became an issue in the 2016 presidential race mostly because of the large number of Puerto Rican voters in the swing state of Florida. Several Republican presidential contenders have come out in opposition to giving Puerto Rico access bankruptcy protection.
“We’re not talking about a bailout, we’re talking about a fair shot at success,” said Mrs. Clinton.
Unlike public entities in U.S. states, municipalities in Peurto Rico cannot seek protection from creditors in U.S. bankruptcy courts.
Puerto Rico officials, including Puerto Rico Gov. Alehandro Garcia Padilla and the island’s non-voting delegate to Congress, have called for legislation that would allow Puerto Rico to access the same bankruptcy laws available to municipalities in states.
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