Despite Puerto Rico Disaster, Vulture Firms Relentlessly Seeking Billions in Debt Payments
Exposé details how firms are banding together to take money from Puerto Rico despite the island's $95 billion in hurricane damage
As Puerto Rico continues its struggle to manage $95 billion in Hurricane Maria-related damage stacked atop its $74 billion of pre-existing debt, investigative journalists have revealed the 10 biggest financial firms that "are still fighting to get billions out of the bankrupt island as it tries to rebuild."
"The popular narrative of Puerto Rico's debt holders is that they are 'small' individual bondholders—rookie investors who trusted their savings to financial firms," they write.
"But our investigation reveals that some of the most aggressive players demanding debt repayment in Puerto Rico's bankruptcy court are so-called 'vulture firms,'" the report continues. "These hedge funds specialize in high-risk 'troubled assets' near default or bankruptcy and cater to millionaire and billionaire investors."
Some of the team appeared on Democracy Now! Wednesday morning to discuss their findings.
In the segment, In These Times executive editor Jessica Stites said that although there are many debt holders, it's these vulture firms that are "fighting tooth and nail in court to try to get this money back"—and, along with the federal government, ignorning growing calls for debt relief.
"The financial firms have organized themselves into alliances to aid their quest to get paid," the report explains. "And with the exception of the Mutual Fund Group, these big alliances are dominated by vulture funds."
These alliances, as CPI's Carla Minet told Democracy Now!, "have the same legal representation. Also, they have the same lobbies. They have the same public relations firms."
This enables them to work together to try to recoup some money, even as the U.S. territory's local government warns that it could run out of money by the end of October, and many of its 3.4 million residents remains without electricity, food, and water.
And although, as the report notes, "the bankruptcy proceedings have been postponed while the island recovers from the hurricane.... while most of the island has been offline, lawyers for the bondholders have not stopped digitally submitting motions in the bankruptcy case."