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63 Loy. L. Rev. 179 (2017)
Municipal Bankruptcy in the Oldest Colony in the World after Puerto Rico v. Franklin California Tax-Free Trust and PROMESA

handle is hein.journals/loyolr63 and id is 187 raw text is: MUNICIPAL BANKRUPTCY IN THE OLDEST COLONY IN THE WORLD AFTER PUERTO RICO V. FRANKLIN CALIFORNIA TAX-FREE TRUST AND PROMESA1 IN TR O D U CTIO N ........................................................................ 179 I. FACTS AND H OLDING .......................................................... 180 A . F A CTS ............................................................................. 182 B . H O LD IN G ........................................................................ 185 II. BA CK G RO U N D ...................................................................... 185 A. PUERTO RICO'S STATUS AS A TERRITORY ....................... 185 B. THE FEDERAL BANKRUPTCY CODE ................................. 191 III. THE COURT'S DECISION ................................................... 194 A. THE M AJORITY OPINION ................................................ 194 B. JUSTICE SOTOMAYOR'S DISSENT .................................... 196 I'V . A N A LY SIS ............................................................................. 198 A. THE AVAILABILITY OF BANKRUPTCY FOR PUERTO RICO'S M UNICIPALITIES ............................................... 198 B. THE PUERTO RICO OVERSIGHT, MANAGEMENT, AND ECONOMIC STABILITY ACT ........................................... 202 C O N C LU SIO N ............................................................................ 205 INTRODUCTION Puerto Rico is in the midst of the most acute fiscal crisis in its history.2 Responding to the crisis, Puerto Rico enacted the Puerto Rico Corporation Debt Enforcement and Recovery Act (Recovery Act) to help alleviate the debt held by its municipal 1. See JoSt TRfAS MONGE, PUERTO RICO: THE TRIALS OF THE OLDEST COLONY IN THE WORLD (1997). The author, a former Chief Justice of the Supreme Court of Puerto Rico and a major contributor to Puerto Rico's Constitution, argues that the Constitution did not significantly change Puerto Rico's status and was designed to disguise the ongoing colonial relationship between the U.S. and Puerto Rico. See generally id. 2. Brief for Petitioners at 1, 5, Puerto Rico v. Franklin Cal. Tax-Free Tr., 136 S. Ct. 1938 (2016) (No. 15-233), 2016 WL 322590, at *5. 179