By comparison, Detroit's 2013 bankruptcy, which sought relief from some $18.5 billion in debt and liabilities, made it the largest such filing in the country's history at the time.
Puerto Rico's governor, Ricardo Rosselló, issued a statement Wednesday seeking to offer some reassurance, even as the territory he leads seeks bankruptcy protection. Many also have struggled to find jobs on an island of 3.4 million people with an unemployment rate that has hovered around 12 percent.
The island has been mired in recession for over 10 years, causing many Puerto Ricans to migrate to the 50 states.
Puerto Rico's financial oversight board filed a debt restructuring petition in federal court Wednesday, the day after several creditors sued over bond defaults, reports Reuters.
With the passing of the May 1 deadline, Puerto Rico's best option may be to enter PROMESA's Title III process, which is a court-supervised process akin to proceedings under chapters 9 and 11 of the U.S. Bankruptcy Code.
Unlike a regular bankruptcy on the USA mainland, a judge can not unilaterally seize any of Puerto Rico's assets without prior authorization from the federal control board.
Puerto Rico owes $73 billion in debt, which it can't pay.
The decision to opt for Title III was also backed by Rossellos predecessor, Alejandro Garcia Padilla, and Rep. Luis Gutierrez, a Democrat from IL. Congress recognizes the crisis in the Commonwealth and its instrumentalities, and explains the fiscal emergency that renders the Commonwealth unable to provide its citizens effective services, while suffering the outmigration of residents and businesses.
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Hyderabad ACP Ramanakumar told The News Minute , "The body has been sent for post mortem and we are waiting for the report . Officials said his body was found hanging from the ceiling early on Wednesday, but that no suicide note has been found yet.
The financial problems of the Caribbean island - which has been locked in recession for more than a decade - have shaken the large market for U.S. municipal bonds, especially after Detroit declared bankruptcy in 2013. The city was able to reach an agreed debt restructuring with stakeholders, in part by soliciting huge contributions from philanthropic foundations so it did not need to sell the city's art collection. The island's latest budget plan includes only $800 million a year to pay back creditors.
The legal proceeding does not mean negotiations toward a compromise must stop, Governor Rossello said in a statement on Wednesday. The low figure alienated creditors and negotiations toward an out-of-court restructuring foundered.
The plan would have seen GO holders recover as much as 77 cents on the dollar, while COFINA holders would have recouped just 58 cents.
Puerto Rico has been negotiating with creditors, mostly investors who bought distressed Puerto Rican bonds at a discount in the hope of making a profit by demanding full payment or something close to it. Island officials have been working with a federal control board set up under the restructuring law adopted previous year.
It set up a bankruptcy-like process tailor-made for Puerto Rico.
During that time, economists and analysts warn, many changes could occur.
Puerto Rican officials triggered the bankruptcy-like process after declaring they could not agree to the massive cuts in spending and new taxes demanded by investors.