Notes from the Puerto Rico Oversight (Not Control) Board 34th Pileggi Lecture
Delaware Journal of Corporate Law, Vol. 43, Pg. 529, 2019
22 Pages Posted: 24 Oct 2019
Date Written: 2019
Like other bankruptcy scholars, I am drawn to financial crises, wherever they occur. When Puerto Rico’s distress deepened and the island passed its own municipal bankruptcy law back in 2014, I did what comes naturally, shifting my gaze to the Caribbean. I wrote op-eds, an amicus brief, and a short white paper, and I started research for a law review article, in each case telling courts and Congress how they should respond to the looming financial catastrophe. I was bold and confident, as law professors so often are. Sweeping proposals come easy when you know you won’t be one of the people making decisions and wrestling with real world compromises. Then suddenly, I was.
This essay, which begins where an earlier essay concluded, chronicles the Board’s efforts to help restore “fiscal responsibility and access to the capital markets” for Puerto Rico, as PROMESA instructs us to do. I begin with a brief sketch of the depth of Puerto Rico’s economic distress, which had plagued Puerto Rico for a decade when Hurricanes Irma and Maria hit in 2017, and of the principal responsibilities vested in the Oversight Board by PROMESA. I then survey the major decisions the Oversight Board has made—or in some cases, unsuccessfully tried to make—and the challenges that remain as the current Board members near the end of our three-year term.
Keywords: Puerto Rico, bankruptcy, long-term economic distress, PROMESA, Oversight Board, fiscal responsibility & access to capital markets, planning & budget reforms, Hurricane Maria, PREPA, electric utility, deficits, liquidity, Appointments Clause challenge, Aurelius Investment, Supreme Court, SCOTUS
JEL Classification: H71, H74, H75, K39, N16, N26, N36
Suggested Citation: Suggested Citation