Puerto Rico has filed bankruptcy:
As per our report last night that following the expiration of the litigation freeze, Puerto Rico’s creditors had filed a barrage of lawsuits against the insolvent Commonwealth a bankruptcy was imminent, moments ago Puerto Rico’s governor announced the commonwealth will request bankruptcy protection of a portion of the island’s $70 billion in debt, setting up a showdown with Wall Street firms owed billions of dollars, in what will be the largest-ever U.S. municipal debt restructuring and further complicating the U.S. territory’s efforts to pull itself out of a financial crisis.
The Puerto Rico restructuring would be far larger than Detroit’s record-setting bankruptcy, with little to no details how long a court proceeding would last or what cuts would are imposed on bondholders. The island’s financial recovery plan covers less than a quarter of the debt payments due over the next decade.
Cited by AP, Gov. Ricardo Rossello said Wednesday that a federal control board overseeing the island’s finances has agreed with his request to put the debts before a court. He told reporters that he has requested that the U.S. territory’s federal financial oversight board commence a Title III proceeding under last year’s Puerto Rico rescue law known as PROMESA. Title III is an in-court debt restructuring process similar to U.S. Bankruptcy. Continue Reading
Hattip to Instapundit. As faithful readers of this blog know, I am, for my sins no doubt, an attorney. My bankruptcy practice has grown 20-25% each year of the Obama administration:
Tax refunds being used to pay for bankruptcy filings. “More than 200,000 money-strapped households will use their tax refunds this year to pay for bankruptcy filing and legal fees, says a new study by the National Bureau of Economic Research.” Continue Reading
Hattip to Ed Morrissey at Hot Air. As regular readers of this blog know, I am, for my sins no doubt, an attorney. I was examining the year end stats for my practice, and I noticed that the legal fees I derived from my bankruptcy representation of creditors and debtors almost doubled in 2009 over what they were in 2008. Therefore, I was little surprised to read that bankruptcies were up 32% in 2009.
U.S. consumers and businesses are filing for bankruptcy at a pace that made 2009 the seventh-worst year on record, with more than 1.4 million petitions submitted, an Associated Press tally showed Monday.
The AP gathered data from the nation’s 90 bankruptcy districts and found 1.43 million filings, an increase of 32 percent from 2008. There were 116,000 recorded bankruptcies in December, up 22 percent from the same month a year before. Continue Reading
In a time when government bailouts are the current craze, it is perhaps impolitic to note that governments at all levels cannot meet the obligations they currently have, let alone fund massive new undertakings.