Puerto Rico teetered into insolvency Wednesday as the chronically troubled U.S. territory of 3.4 million citizens buckled under its ever-increasing debt, which stands at $73 billion.
The process that Puerto Rico has undertaken is a prelude to bankruptcy, but in this case it is tailored for governments. Given the size of the debt, it would be the largest such insolvency in U.S. history, far outstripping Detroit’s $18 billion restructuring in 2013.
“Puerto Rico’s problems have been decades in the making,” said Michael F. Williams, the attorney who represented Puerto Rico in its financial crisis litigation until recently. “One can only hope that this filing puts Puerto Rico on the path to a fresh start.”
Puerto Rico’s situation is not dissimilar to Detroit’s, which was the culmination of years of economic stagnation and bad policy. Puerto Rico, an island in the Caribbean that is about the size of Connecticut with…
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