The supreme court has just ruled that Puerto Rico is not allowed to adopt its own legislation to reconstruct their debt due to a 1984 federal bankruptcy law provision that prohibits the commonwealth from seeking protection.

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Justice Clarence Thomas says,

“The plain text of the Bankruptcy Code begins and ends our analysis.”

He says that the “unambiguous language” of the bankruptcy measure preempts any effort by Puerto Rico to fashion its own bankruptcy process. The decision was made after there has been efforts to help PR as they face over $2 billion in payments due July 1. Last week there was a rescue bill passed that would create an oversight board empowered to help overrule the local officials on different spending plans and force debt restructuring on recalcitrant bondholders.