Puerto Rico Fed Board Looks To Invalidate $6B In Bond Debt

Law360 (January 15, 2019, 6:20 PM EST) -- A federally-appointed board tasked with overseeing Puerto Rico’s monumental debt restructuring joined with the island’s unsecured creditors Monday to demand that $6 billion in general obligation bond debt be wiped out, arguing the bonds violated provisions in the Puerto Rican Constitution when they were issued a few years ago.

In Monday’s omnibus objection, the oversight board and the committee of unsecured creditors said the bonds should be declared null and void because they violate a debt service limit and the balanced budget clause contained in the U.S. territory's constitution.

The board and the committee said previous Puerto Rican administrations had sought...

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