This issue of the JCR focuses on the restructuring of Puerto Rico. Like the island’s history, the restructuring efforts involving this commonwealth were, in a word, “complicated.”
Puerto Rico has a long, rich, and proud history and cultural identity. Before Christopher Columbus set foot on the island, its native Taino Indians dubbed it Boriken, which means Land of the Valiant and Nobel Lord. It was not until 1521 that the island, after many name changes, became known as Puerto Rico, with its capital city and main shipping port taking the name San Juan. Becoming a commonwealth in 1952, it is as much a part of the United States, and its population its citizens, as it is an independent country, due mostly to its strong cultural identity. Puerto Rico even competes independently in the Olympics.
The bankruptcy of Puerto Rico eclipsed anything the restructuring world has ever seen in terms of governmental entities. The commonwealth’s $120 billion in debt and pension obligations far exceeded the debt structure of the next largest municipal bankruptcy, the city of Detroit, which managed a mere $18 billion in debt by comparison.
After many years and many lessons learned from this storied bankruptcy, under the judicial oversight of Chief Judge Laura Taylor Swain of the Southern District of New York, Puerto Rico emerged from bankruptcy just few weeks ago, making the insights shared in of this issue of the JCR timely, relevant, and real, and with many great lessons for the professionals of our community.
The appointment of Judge Swain to oversee Puerto Rico’s bankruptcy by John Roberts, chief justice of the United States, was fortuitous indeed. Judge Swain was a U.S. bankruptcy judge in the Eastern District of New York from November 1996 until her appointment to the U.S. District Court in July 2000.
The complexities of this bankruptcy speak to so many issues that carry lessons for TMA professionals. Whether it be resumption of billion-dollar payments to bondholders, restoration of pension funds, or how to manage austerity in a long-stressed environment for many years, we share many important takeaways in this edition of the JCR.
The lessons shared here will be carried to other municipalities that are trying to cope under the weight of debt, bond defaults, and underfunded pensions. This real and relevant information on these complex issues, created and shared by our professionals who make results happen, provides yet another tool in the arsenal of our TMA professionals.
As you thumb through this edition, even if you are not involved in bankruptcies like this, I hope you will take in the wealth of information and the deep thought and research that have gone into what is being shared. It is one of the member benefits that is so invaluable to all who are part of TMA.
Beyond what is shared in the pages of the JCR, the coming months boast great education opportunities all throughout TMA Nation. From regional conferences in the Southwest, Mid-Atlantic, Southeast, and Northeast to the 2022 Annual European, all leading up to the TMA Annual, we are in a season of great opportunity to learn, connect, and explore.
This edition of the JCR, focused on one of the most complex restructurings ever, whets the appetite and stimulates the intellectual senses. Knowing that, enjoy what you are about to experience and then consider taking advantages of the many other opportunities to learn and connect coming your way in the months that follow, all brought to you by TMA.
Scott Y. Stuart, Esq.
TMA Global CEO