He said it was the right path for protecting Puerto Ricos residents and the interests of its creditors after a moratorium protecting the Caribbean island from creditor litigation expired on Monday.
Gov. Rossello announced on Wednesday, May 3, 2017, a historic restructuring of a portion of the USA territory's $70 billion debt through courts after negotiations with bondholders failed.
Another lawsuit filed by Ambac Assurance Corp. accuses the government of illegally retaining $300 million owed to bondholders. Puerto Rico has lost more than 10 percent of its population in that period. With the May 1 deadline passed, Puerto Rico is now vulnerable to legal challenges by creditors, with one lawsuit filed early Tuesday morning.
Puerto Rico and its general obligation bondholders, whose $18 billion of debt is backed by the island's constitution, were negotiating until the last minute.
More than 2,000 investors have already filed claims based on representations from the island broker-dealers that the bonds were safe. Roughly a third of Puerto Rican tax revenue now goes to cover debt, and the territory also has more than $40 billion in unfunded pension liabilities. Title III is part of the Puerto Rico Oversight, Management and Economic Stability Act.
The newest suits come after the administration of Gov. Ricardo Rossello failed to negotiate any deal with bondholders after the May 1 deadline of the litigation freeze. Since this process has never been used before, there is no real precedent for the case - meaning that whomever Roberts appoints for the job will have a great deal of control over Puerto Rico's future. It's unknown how long the bankruptcy-like process will take, although local government officials believe it could be resolved in four years.
"At least essential services would be guaranteed", he said.
Blade Runner 2049 Teaser Trailer Unveiled
Two new, slick posters for Blade Runner 2049 starring Harrison Ford and Ryan Gosling were released on Thursday. There are many questions we want to know about the first film, which we hope will be answered in the sequel.
The legal proceeding does not mean negotiations toward a consensual restructuring agreement must stop though, the governor said.
Marchers blamed Governor Ricardo Rossello for agreeing to cuts to education, health, social security and other public services with the United States federal control board overseeing the island. The people of Puerto Rico have had enough.
The board members and others authorities could not be immediately reached for comment as the lawsuits landed before dawn. As this case moves forward, it will represent the largest bankruptcy ever experienced by the USA municipal bond market, estimated to be worth $3.8 trillion. "It's essentially a bankruptcy process custom-built for Puerto Rico's debt crisis".
He also noted that that the government has to walk a fine line with bondholders amid negotiations.
"I'm not going to allow that to happen", he said. "Where that sweet spot is, nobody exactly knows".
Rossello's latest offers to creditors show the commonwealth believes general obligations should receive a better recovery than its sales-tax bonds, another major class of its debt. But numerous agencies that have issued government debt in Puerto Rico missed payments, putting them in default.