Puerto Rico was hit with two lawsuits that for the first time challenge the constitutionality of a federal control board overseeing the island’s finances and its power to start a bankruptcy-like court process for some of the U.S. territory’s more than $70 billion public debt.
One of the lawsuits was filed by U.S. hedge fund Aurelius Capital Management, which holds more than $470 million in Puerto Rico general obligation bonds, among other debt. It is the same hedge fund that was involved in a 15-year dispute over defaulted bonds issued by Argentina.
