Even a government like the Territory of Puerto Rico can file for bankruptcy protection.
Here’s the story from The Trumpet:
“What lessons should America learn from Puerto Rico?
uerto Rico just triggered the biggest bankruptcy in the history of the American public bond market. On May 3, the island announced that its debts would not be paid, and it filed for bankruptcy protection
under a new law written specifically for the island territory. A federal judge will now determine who gets how much of the $123 billion debt Puerto Rico and its public corporations owe to both investors and union pensions.
The total amount defaulted on by Puerto Rico dwarfs all U.S. precedents. The Detroit bankruptcy in 2013, for example, totaled $18 billion. Jefferson County, Alabama’s, 2011 filing totaled $4 billion.”
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