A liquidation of the Government Development Bank for Puerto Rico could be a messy proceeding, because there is no precedent for determining how debt responsibilities and assets would be assigned, Economist and Professor Antonio Fernós-Sagebien predicted Wednesday.
The Puerto Rico government’s decision to default on a portion of the $470 million in debt service payments due Monday drew reactions from politicians, analysts and creditors alike, who both urged Congress to act on the Commonwealth’s behalf and predicted long court battles ahead.
Calling on Congress to take swift action to create a debt restructuring mechanism and saying resources are “scarce,” Puerto Rico Gov. Alejandro García-Padilla confirmed Sunday he has ordered a moratorium on the debt service payments due from the Government Development Bank.
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