Saturday, May 27, 2023

A Need for Justice

By on March 12, 2022

A great debate has ensued after the approval of the plan of adjustment for Puerto Rico’s bankruptcy over who won and who lost. The reality is that Puerto Rico found itself buried under a mountain of obligations it could not pay. It took a lot of give and take from all parties at the table to reach a transaction that could receive the support of the majority and be approved by the federal judge overseeing the process.

Despite the outcry, all parties walked away with something, even if it was not what they aspired to. The government obtained deep cuts in their debt obligations, providing relief. Pension obligations were kept basically intact and were prioritized over creditors as Natalie Jaresko pointed out in her interview with a local journal as she announced her resignation as executive director. The plan of adjustment assigns $1.4 billion annually to meet pension obligations whereas $1.15 billion annually
go to pay bondholders, including Cofina, as highlighted in the article.

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