A judge for the US Bankruptcy Court for the District of Puerto Rico Tuesday gave final approval to a plan for Puerto Rico to exit bankruptcy after nearly five years.
The restructuring plan, signed by Judge Laura Taylor Swain, marks the largest public-sector debt restructuring deal in US history, reducing the island territory’s debt by about 80 percent from more than $33 billion to about 7.4 billion.
The Financial Oversight & Management Board for Puerto Rico filed for bankruptcy protection in 2017 after the territory declared in 2015 that it was unable to pay its creditors. Tuesday’s plan will allow Puerto Rico to begin repaying its debts.
In a statement, the Financial Oversight and Management Board said, “Today begins a new chapter in Puerto Rico’s history. Today, Puerto Rico can start to move on from fiscal instability and insolvency into a future of opportunity and growth.”
Puerto Rico’s financial crisis stemmed from decades of mismanagement and corruption and has been exacerbated by recent events including hurricanes, earthquakes, and the COVID-19 pandemic.
