Puerto Rico announces historic debt restructuring in court

FILE - In this April 30, 2015, file photo, people gather in front of the Puerto Rico’s Capitol building to protest against Gov. Alejandro Garcia Padilla's budget proposal for the next fiscal year in San Juan. Authorities announced on Monday, Jan. 18, 2016, that Puerto Rico's worsening economic crisis has forced it to revise a fiscal reform plan to reflect a jump in the island's projected deficit and a steep drop in anticipated revenue. (AP Photo/Ricardo Arduengo, File)

SAN JUAN, Puerto Rico (AP) – Puerto Rico’s governor has announced a historic restructuring of a portion of the U.S. territory’s $70B debt through courts after negotiations with bondholders failed.

Gov. Ricardo Rossello said Wednesday that a federal control board overseeing the island’s finances has agreed with his request to put the debts before a court. It’s a process similar to bankruptcy.

The island was hit with several lawsuits on Tuesday after a freeze on litigation that protected the government from lawsuits by creditors expired. The restructuring through courts will once again protect Puerto Rico from such lawsuits.

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