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In addition, Section 109(c) requires that a Chapter 9 debtor:
(i) be "specifically authorized, in its capacity as a
municipality or by name, to be a debtor under such
chapter by State law, or by a governmental officer or
organization empowered by State law to authorize
such entity to be a debtor under such chapter";
(ii) be insolvent;
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(iii) "desire[] to effect a plan to adjust [its] debts; and"
(iv) that it:
(a) "has obtained the agreement of creditors holding
at least a majority in amount of the claims of each
class that such entity intends to impair under a
plan in a case under such chapter;
(b) has negotiated in good faith with creditors and has
failed to obtain the agreement of creditors holding
at least a majority in amount of the claims of each
class that such entity intends to impair under a
plan in a case under such chapter;
(c) is unable to negotiate with creditors because such
negotiation is impracticable; or
(d) reasonably believes that a creditor may attempt to
obtain a transfer that is avoidable under Section
547 [i.e., a preference] of [the Bankruptcy Code]."
2. The Restructuring of U.S. Territories through
PROMESA
In response to the Puerto Rico debt crisis
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, the U.S. Congress
passed
133
the Puerto Rico Oversight, Management, and Economic
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See discussion of insolvency in Chapter IV.A.3. above.
