Credit Slips Presents: A Virtual Symposium on Puerto Rico
Puerto Rico debt restructuring legislation is flying fast and furious around Congress. But the air contains more than a whiff of defeatism regarding the prospects of passage. Bills vary greatly in substance and scope, and yet apparently the response of powerful creditors is consistent: they want to retain the right to be holdouts and are making that position perfectly clear to our elected representatives.
Credit Slips contributors are no strangers to anti-restructuring advocacy, whether framed as moral hazard or otherwise. To that end, we embark on a virtual symposium inspired by the following question: What could the Executive Branch do to facilitate the restructuring of government debt in Puerto Rico absent Congressional action?
On tap to brainstorm around this theme in the next two weeks are (in alphabetical order): Anna Gelpern, Melissa Jacoby, Bob Lawless, Adam Levitin, Stephen Lubben, Katherine Porter, John Pottow, Mark Weidemaier, and Jay Westbrook.
The "brainstorm" reference is intentional. We are exploring ideas, not writing advocacy briefs. What tools are illustrative from the most recent mortgage and financial crisis? Soft power as well as official power is on the table. Are there private transactions that might pave the way to bankruptcy eligibility that the Obama Administration could support or facilitate? Anything to be borrowed from transnational insolvency and sovereign debt crises? We will readily link to other thinkers on this subject, so, readers, please enrich this debate by posting in the comments or tweeting suggestions at me (@melissabjacoby).
By mid-March, we inevitably will venture into an additional branch of the federal government. On March 22, 2016, the United States Supreme Court will hear oral argument on Puerto Rico v. Franklin California Tax-Free Trust, 15-323 (Justice Alito not participating). Is Puerto Rico's own restructuring law preempted as the First Circuit and District Court held? Lubben says no and I, for one, have been finding that view a bit harder to resist. Stay tuned.
Conference room photo courtesy of Shutterstock