A look at the latest twist in Puerto Rico’s debt saga

People carry a large Puerto Rican flag as they protest looming austerity measures amid an economic crisis and demand an audit on the island's debt to identify those responsible, in San Juan, Puerto Rico, Monday, May 1, 2017. Puerto Rico is preparing to cut public employee benefits, increase tax revenue, hike water rates and privatize government operations, among other things. (AP Photo/Danica Coto) People carry a large Puerto Rican flag as they protest looming austerity measures amid an economic crisis and demand an audit on the island's debt to identify those responsible, in San Juan, Puerto Rico, Monday, May 1, 2017. Puerto Rico is preparing to cut public employee benefits, increase tax revenue, hike water rates and privatize government operations, among other things. (AP Photo/Danica Coto)

By Associated Press May 3, 2017 3 min read

A look at the move by Puerto Rico’s government to seek a form of bankruptcy protection as the U.S. Caribbean island territory struggles to emerge from a prolonged debt crisis and recession.

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DID PUERTO RICO JUST FILE FOR BANKRUPTCY?

Sort of. As a U.S. territory, the island cannot follow the court process used by other U.S. municipal governments such as Detroit. Gov. Ricardo Rossello triggered a bankruptcy-like process by declaring Puerto Rico could not agree to big cuts in spending and new taxes demanded by bondholders. His move puts in the hands of federal judge the restructuring of a portion of the island’s $73 billion in public debt. Puerto Rico was authorized to take this legal route under a restructuring plan adopted by Congress last year.

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