Blumenthal Statement on Bondholder Lawsuits Against Puerto Rico

(Hartford, CT) – U.S. Senator Richard Blumenthal (D-Conn.) issued the following statement today on the lawsuits filed by two bond insurers against Puerto Rico for failure to meet its bond payment deadlines:

“Today’s lawsuits against Puerto Rico are a likely tipping point in the island’s debt debacle. Now, instead of using critical, scarce resources to pay its debts, Puerto Rico will be paying attorneys, fighting preventable litigation, and spiraling deeper into completely avoidable economic turmoil. Congress can still – and must – act to stem this crisis, which is affecting 3.5 million American citizens in Puerto Rico, by passing my legislation to allow them to restructure their debts.”

Last month, Blumenthal and Senators Elizabeth Warren (D-Mass.), Harry Reid (D-Nev.), and Chuck Schumer (D-N.Y.) introduced the Puerto Rico Emergency Financial Stability Act, which would establish a short-term stay on creditor litigation until Congress takes action to allow Puerto Rico to restructure its debts. Over the summer, Blumenthal and Schumer introduced the Puerto Rico Chapter 9 Uniformity Act to grant Puerto Rico the authority to allow its municipalities and public utilities to restructure their debts under the supervision of a bankruptcy court, authority which is already currently granted to all U.S. states.

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