Episode Details

Puerto Rico may have filed to formally restructure back in 2017, but the lessons that can be learned still apply today. Former oversight board member David Skeel joins Jane Komsky to discuss his new book Promise Land which delves into the creditor battles, political compromises and lessons behind and beyond his experience navigating the restructuring.

Skeel maps the competing claims of roughly $18bn of General Obligation bonds, $18bn of sales tax-backed Cofina bonds, clawback creditors, pension bonds and general unsecured creditors. He also recounts Aurelius’ role and attempt to mastermind the restructuring.

The discussion explains how Promesa created the oversight board and Title III restructuring framework, and why Skeel believes an out-of-court resolution was ultimately unworkable. He recounts some of the unforeseeable obstacles including Hurricane Maria, political upheaval and the pandemic repeatedly disrupted negotiations, as well as divisions within the board complicating its dealings with creditors.

For distressed and municipal bond investors, Skeel’s conclusions extend beyond Puerto Rico. To get the full story, Skeel’s book is available for purchase here.

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