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House Conservatives Oppose Some Parts of Puerto Rico Fix

Thursday, March 31, 2016   (0 Comments)
Posted by: Sharon Edmondson
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The Republican Study Committee will oppose the Puerto Rico fix in its currently drafted form. The opposition is focusing on the “cram down” provisions modeled after a specific section of the bankruptcy law that deals with situations in which creditors cannot agree on debt restructuring.

The section of bankruptcy code, 1129(b), used by the draft bill requires a court to decide on a fair and equitable cut to investment among all creditors if an agreement with the borrower (in this case, Puerto Rico's government and/or public corporations) can't be reached. In the bill, a federal oversight board can send a debt-restructuring disagreement between creditors and the government to court under the same parameters as the bankruptcy code.

The RSC does not mandate that its members vote in a certain way but this could cause problems for the bill among House Republicans.


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