U.S. Chief Justice John Roberts on Friday appointed a federal judge based in Manhattan to oversee Puerto Rico’s landmark bankruptcy case.
In a brief statement, Roberts said he had designated U.S. District Judge Laura Taylor Swain of the Southern District of New York to the biggest bankruptcy in the history of the U.S. municipal debt market. Puerto Rico has $70 billion in debt.
Puerto Rico filed for bankruptcy on Wednesday. Some of its public agencies are expected to do the same in coming days.
Because the U.S. territory is not eligible for traditional bankruptcy protection, the filing came under Title III of PROMESA, the federal Puerto Rico rescue law passed last year.
Under PROMESA, the chief justice is tasked with selecting a federal judge to oversee the case, which was filed in federal court in San Juan, Puerto Rico.
Puerto Rico has a 45 percent poverty rate and unemployment is twice the U.S. average. While it remains to be seen how much of the $70 billion in debt will be included in the bankruptcy, its restructuring is sure to be the largest and among the most complex in municipal market history.
Deep-pocketed creditors from myriad public issuers are battling on many fronts, competing for repayment priority while challenging the authority of Puerto Rico’s federal financial oversight board to put the island into bankruptcy in the first place.
(Reporting by Lawrence Hurley; Additional reporting by Nick Brown in New York; Editing by James Dalgleish)