Blumenthal, Schumer Introduce Legislation to Grant Puerto Rico Ability to Declare Bankruptcy for Its Municipalities & Public Utilities, Avoid Growing Fiscal Crisis

Today, U.S. Senators Richard Blumenthal (D-Conn.) and Charles E. Schumer (D-N.Y.) announced The Puerto Rico Chapter 9 Uniformity Act, legislation they have co-authored and introduced to address the growing fiscal crisis in Puerto Rico by granting Puerto Rico the authority to allow its municipalities and public utilities to readjust their debts under the supervision of a bankruptcy court. The Puerto Rico Chapter 9 Uniformity Act will provide Puerto Rico with the same authority granted to all U.S. states that enables its municipalities and public utilities to restructure their debt.

"This measure is vital to prevent a humanitarian and financial catastrophe -- a clearly avoidable disaster," said Blumenthal. "Creditors, investors, ordinary citizens, all will be harmed if the Congress fails to act. This measure is not a bailout -- involving not a dime of federal funds. It enables an orderly, rational restructuring of debt, instead of a financial free for all and potential free fall."

"We can either do the right thing and give Puerto Rico the bankruptcy option it needs and deserves, or we can risk a disaster on the island and billions in bailout payments later," said Schumer. "Allowing Puerto Rico's municipalities to go through the bankruptcy process, just like other American municipalities, is the right way to begin untangling the fiscal mess on the island, and I hope both parties will come together to get this done."

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