Title III Bankruptcy Process

Title III bankruptcy, also known as the Puerto Rico Oversight, Management, and Economic Stability Act (PROMESA), establishes a legal process for Puerto Rico and similar entities to restructure their debt when facing financial crises. It involves creating a federal oversight board to develop a plan to reduce debt and restore fiscal stability. Creditors and the debtor negotiate, and if an agreement isn’t reached voluntarily, the oversight board can seek court approval for a binding resolution. The process aims to fairly address debt burdens while allowing the entity to regain financial self-sufficiency.