The Obama Administration, Puerto Rico's Governor Unveil "Super Chapter 9" For Puerto Rico

WASHINGTON, Oct. 21, 2015 /PRNewswire-USNewswire/ -- Main Street Bondholders Coalition, a project of the 60 Plus Association, a seniors organization representing more than 7.2 million Americans, denounces Puerto Rico Governor Alejandro Garcia Padilla and the Obama Administration's plan to violate Puerto Rico's Constitution by abandoning the Commonwealth's debt obligations. 

• The Administration's unprecedented proposal, so-called "Super Chapter 9", would restructure all of Puerto Rico's debt, including its Constitutional debt, and is widely expected to disrupt U.S. municipal debt markets – raising the cost of borrowing for states and municipalities across the country.
• Jim Millstein, Puerto Rico's chief restructuring advisor, has aggressively pushed for Super Chapter 9, ignoring bi-partisan interest in Congress for a deal that would bring desperately needed fiscal reform combined with an orderly restructuring mechanism for Puerto Rico's non-Constitutional debt. Millstein has been criticized for profiting from his business dealings around Puerto Rico's settlement with PREPA's bondholders, yet continues to advise the Commonwealth.
• "Super Chapter 9" is without precedent, and would create a playbook for other states to discharge their Constitutional or "full faith and credit" debt. This reckless action would put every retirement account in America at risk.

George Carroll, a member of the Main Street Bondholders, a Puerto Rican constitutional bondholder and retired municipal bond adviser from Red Bank, New Jersey said:

"Impairing constitutionally protected general obligation bonds will bring chaos to America's municipal bond market.  This will spur other states from New Jersey to Illinois to ask for Super Chapter 9, and the result would be a disaster for millions of American retirees who are invested in state and local general obligation bonds. This is an incredulous, and foolhardy assault by Governor Garcia Padilla and the Obama Administration against the rule of law and the municipal bond market.  Fixing Puerto Rico starts with fiscal reforms and an orderly restructuring process; not impairing constitutional debt."

Franco Rosaly, a member of Main Street Bondholders, a Puerto Rican bondholder, an Attorney and family business manager from San Juan, said:

"Governor Garcia Padilla and the Obama Administration declared today their support for the violation of the Puerto Rican Constitution with the endorsement of Super Chapter 9. This action by the Governor and President Obama represents a callous disregard for the rule of law and the thousands of Puerto Ricans who have literally invested their life savings in Puerto Rican bonds." 

Main Street Bondholders Coalition is a project of the 60 Plus Association, and is comprised of small bondholders from across America who are committed to a policy process that returns Puerto Rico to sound financial management, respect for the rule of law, and the protection of their retirement savings.

Contact: Janet Wootten  
[email protected]

SOURCE Main Street Bondholders