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U.S. to Back Puerto Rico Law, Slowing Plan to Restructure Debt

  • Federal intervention may delay island’s exit from bankruptcy
  • DOJ has until Feb. 7 to submit its brief on the case
Hedge Funds Facing Biden Tax Threat Grab Toehold In Puerto Rico
Photographer: Xavier Garcia/Bloomberg
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The U.S. Department of Justice said on Friday that it will intervene in Puerto Rico’s four-year bankruptcy case to defend a federal law that gave the island the ability to cut its obligations through the courts.

The move, intended to stave off challenges that the bankruptcy is unconstitutional, may actually prolong the commonwealth’s efforts to restructure its $33 billion of debt and exit court oversight. The bankruptcy is the largest ever in the $4 trillion municipal-bond market.