He said that moving the proceedings to bankruptcy court would put the situation in “free-fall.”
The creditors got a shock this year when Mr. Rosselló issued a five-year fiscal plan
that allowed only about $800 million a year to pay principal and interest on Puerto Rico’s bond debt, far less than the roughly $3.5 billion a year it would cost to make those payments on time.
Puerto Rico Declares a Form of Bankruptcy -
By MARY WILLIAMS WALSHMAY 3, 2017
With its creditors at its heels and its coffers depleted, Puerto Rico sought what is essentially bankruptcy relief in federal court on Wednesday, the first time in history
that an American state or territory had taken the extraordinary measure.
“We remain committed to holding good-faith negotiations to reach agreements with our creditors,” he said, adding
that he hoped the court proceedings would “accelerate the process.” He appeared to be referring to the extraordinary power Puerto Rico will now have in court to unilaterally impose big losses on creditors.
The island’s many creditors — whose lawsuits filed against Puerto Rico on Tuesday prompted the island’s request
for court relief on Wednesday — are likely to receive far less of their money back than they want.