On June 28, 2014, the Commonwealth of Puerto Rico adopted the Puerto Rico Corporations Debt Enforcement & Recovery Act, Act 71-2014 (the “Debt Enforcemen enabling certain Commonwealth public corporations in financial distress to restructure their debt obligations. The Debt Enforcement Act is focused on establishing a restructuring regime for the financial obligations of the Puerto Rico Electric Power Authority ( Puerto Rico Highways and Transportation Authority (“PRHTA”). The goal of the new law is to balance the interests of creditors and other stakeholders with the interest of the Commonwealth to protect its citizens and to ena the financially distressed public corporations to continue to provide essential government services such as the delivery of electricity, gas and clean water.
The Debt Enforcement Act, though, is not limited to restructuring and enforcement of debt obligations or securities. If you lent money or extended other forms of credit, or provided goods or services, to PREPA, PRHTA or other Rico, this new law may affect you.
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