Puerto Rico’s governor on Monday called for the commonwealth to be allowed to restructure its debts under U.S. bankruptcy code, while a newly appointed adviser to the U.S. territory said it is “insolvent” and will soon run out of cash.
Governor Alejandro Garcia Padilla, in a televised address, said sacrifice must be shared by bondholders, as he called for Washington to allow a bankruptcy debt restructuring.
The Caribbean island is struggling to relieve a $73 billion debt burden. It came to a crunch point on Monday – ironically at the same time as did debt-laden Greece – after a dire report on its stability by former International Monetary Fund economists was released ahead of key deadlines on Wednesday to repay debt.
Steven Rhodes, the retired U.S. bankruptcy judge who oversaw Detroit’s historic bankruptcy and has now been retained by Puerto Rico to help solve its problems, gave a blunt assessment on Monday.
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