Law360, New York (February 08, 2015, 12:51 PM ET) -- A federal judge struck down a Puerto Rico law that threatened investors in public corporations with harsh restructuring terms, a victory for investment funds battling to protect billions of dollars in debt claims against the commonwealth’s beleaguered electric utility.
In a sweeping decision voiding the commonwealth’s so-called Recovery Act, U.S. District Judge Francisco A. Besosa found that the local debt restructuring system for certain Puerto Rico public corporations contravened federal bankruptcy law and was therefore unconstitutional. Bondholders feared the Recovery Act, enacted hurriedly in June under.
By Andrew Scurria
Puerto Rico Bondholders Shoot Down Restructuring Law
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