The U.S. Bankruptcy Code generally precludes Puerto Rico, unlike the states, from seeking bankruptcy protection for its municipalities and public corporations. That would mean Puerto Rico is free to pass its own bankruptcy law to fill the void. If Congress had wished to exempt Puerto Rico from the entire federal bankruptcy law, it would have said so explicitly, Thomas added. The case, titled Puerto Rico v. Franklin California Tax-Free Trust, centered on whether the island is excluded from some aspects of federal bankruptcy law, but not others. A 1984 congressional amendment established that Puerto Rico is not considered a "state" for the purpose of such protections.

Source: Huffington Post June 13, 2016 21:00 UTC