House Judiciary Committee Unlikely to Act on Puerto Rico Bankruptcy Bill

WASHINGTON — The House Judiciary Committee is unlikely to pass legislation that would give Puerto Rican municipalities and utilities the ability to file for bankruptcy protection under Chapter 9, committee chair Rep. Bob Goodlatte, R-Va., suggested on Wednesday.

"Today, we met with our Republican colleagues on the Judiciary Committee to discuss the issues facing Puerto Rico," Goodlatte said in a joint statement with Rep. Tom Marino, R-Pa., chair of the subcommittee on regulatory reform, commercial and antitrust law. "While no consensus was reached, a general concern was expressed that to provide Puerto Rico's municipalities access to chapter 9 of the Bankruptcy Code would not, by itself, solve Puerto Rico's difficulties, which are associated with underlying, structural economic problems."

Goodlatte added that the committee will continue to monitor the economic situation in Puerto Rico and consider potential congressional responses.

The statement was issued as the subcommittee is considering H.R. 870, which would give the territory the power to permit its municipalities and public corporations to file for bankruptcy under Chapter 9.

Puerto Rico currently has approximately $72 billion in public debt, which Gov. Alejandro Garcia Padilla said last week is not payable.

Proponents of extending Chapter 9 bankruptcy powers to Puerto Rico argue it is a logical step to help the struggling island.

Sens. Chuck Schumer, D-N.Y., and Richard Blumenthal, D-Conn., are preparing to propose companion legislation to H.R. 870 in the Senate. Several presidential candidates including former Florida governor Jeb Bush, former Secretary of State Hillary Clinton and Sen. Bernie Sanders, I-Vt., have also called for congressional action on the issue.

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Law and regulation Bankruptcy Puerto Rico
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