3The Supreme Court of the United States has decided that was the intent of Congress invest the Commonwealth of Puerto Rico of rights and similar to a federal state authority. The First Circuit Court of Appeals has ruled that Puerto Rico is sovereign, that was the main consideration that motivated the Supreme Court in
Lopez,831 F.2d 1164, 1168 (1st. Cir. 1987), cert. denied 486 U.S. 1034 (1988). Consequently, this Legislature has the power to make a law directed to give certainty to creditors on the possibility of restructuring the debt of eligible public corporations.Existing loophole in our system creates uncertainty unacceptable. Under these circumstances this Legislature hereby establishes a system to reorganize debts and obligations, support the federal legislation so permits.
Smart,145 U.S. 454, 457 (1892),
International Shoe Company v.
Pinkus,278 U.S. 261, 264 (1929). The restructuring of these government debts can benefit both public corporations as bondholders receiving the certainty it provides a specific legal framework for this.
Park,316 U.S. 502, 504 (1942), cited with approval in
U.S. Trust Co. . of
New York v. New Jersey
431 U.S. 1, 28 (1977). This Act aims to implement this authority
of the Commonwealth of Puerto Rico within the framework of its constitutional relationship with the United States of America.This Act creates a process for eligible public corporations to restructure their debts under the supervision of the Court and consensus with creditors. That way we can protect our public corporations while fulfilling our obligation to the creditors. This Act incorporates the scrutiny demanded the Supreme Court of the United States at
Co.,supra to modify debt agreements. Thus, the public interest to have efficient public corporations while the rights of the bondholders and other creditors are protected is protected:..
ENACTED BY THE LEGISLATURE OF PUERTO RICO
Section 1 - the "Law on Restructuring of Public Corporations" is created, known in English as "Public Corporation Restructuring Act" for its English text read as follows: