WASHINGTON — The U.S. Supreme Court is taking up an appeal from Puerto Rico officials seeking to restructure the debt of the commonwealth’s financially struggling public utilities.
The justices said Friday they will review a lower court ruling that said Puerto Rico could not pass a law giving local municipalities the power to declare bankruptcy.
Puerto Rico lawmakers passed the law last year to help the cash-strapped utilities meet their obligations to bondholders and creditors. Puerto Rico is in a nine-year economic slump and struggling with $72 billion in public debt.
But a federal district court ruled that the measure is not permitted by federal bankruptcy law. The 1st U.S. Circuit Court of Appeals agreed.
Puerto Rico argues that nothing in federal law prevents it from enacting its own laws to restructure debt.