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The Puerto Rico Oversight, Management, and Economic Stability Act (PROMESA) is a U.S. federal law enacted in 2016 that established a financial oversight board, a process for restructuring debt, and expedited procedures for approving critical infrastructure projects in order to combat the Puerto Rican government-debt crisis. Through PROMESA, the US Congress established an appointed Fiscal Control Board (FCB), known colloquially in Puerto Rico as "la junta," to oversee the debt restructuring. With this protection the then-governor of Puerto Rico, Alejandro García Padilla, suspended payments due on July 1, 2016. The FCB's approved fiscal austerity plan for 2017-2026 cut deeply into Puerto Rico's public service budget, including cuts to health care, pensions, and education, in order to repay creditors. By May 2017, with $123 billion in debt owed by the Puerto Rican government and its corporations, the FCB requested the "immediate" appointment of a federal judge to resolve the "largest bankruptcy case in the history of the American public bond market."
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Financial Oversight and Management Bd. for Puerto Rico v. Aurelius Investment, LLC, 590 U.S. ___ (2020), was a United States Supreme Court case in which the Court held that appointments to the Financial Oversight and Management Board for Puerto Rico are not subject to the restrictions in the Appointments Clause of the U.S. Constitution. The Court held that all officers of the United States are subject to the Appointments Clause even if their duties relate to Puerto Rico. However, the power they exercise must be primarily federal in nature for the Clause to apply. If the officer exercises powers primarily of a local nature, even if created by federal law, then the officer is not "of the United States" and is exempt from compliance with the Clause. As members of the Board are primarily concerned with the governance of Puerto Rico, even though their decisions have potentially nationwide consequences, their powers are primarily local in nature and need not be appointed in compliance with the Clause.
References
- 1 2 3 Treanor, Jill (20 September 2013). "Co-op forced to consider hedge fund plan". The Guardian. Manchester. Archived from the original on 4 March 2016. Retrieved 24 October 2013.
- 1 2 Editorial, Reuters. "Exclusive: However on July 30th, 2014 a US judge has ruled that the "hold-outs" must be paid by Wednesday night if no deal is agreed. www.bbc.com/news/business-28558121. Hedge fund Aurelius holds Ukraine debt, asking better terms". U.K. Archived from the original on 19 January 2018. Retrieved 19 January 2018.
- ↑ Blount, Jeb. "Petrobas Deadline Prompts Some Bondholders to push for default". Newsweep. Archived from the original on 2015-01-29.
- ↑ "Aurelius hedge fund seeks to toss Puerto Rico's bankruptcy filing". Reuters. 2017. Archived from the original on 19 January 2018. Retrieved 19 January 2018.
- ↑ "Subscribe to read". Financial Times. Archived from the original on 19 January 2018. Retrieved 19 January 2018.
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