Puerto Rico’s expenditure on consultants and legal fees stemming from its municipal bankruptcy has exceeded $2 billion. This figure underscores the financial burden of managing what has become the most costly municipal bankruptcy in the history of the United States. Since the island territory entered bankruptcy proceedings in 2017, Puerto Rico has engaged in a complex restructuring of its public debt, which originally stood at $74 billion.
A recent report from the Puerto Rican think-tank Espacios Abiertos indicates that fees for consultants, lawyers, and other professionals associated with the bankruptcy have increased by 35% since June 2024. This surge significantly exceeds prior estimates made by the Congressional Budget Office, which, back in 2016, projected these costs would amount to $370 million.
Prominent firms such as McKinsey & Company and Ernst & Young have been identified among the largest recipients of these fees. Their involvement highlights the extensive reliance on external expertise to navigate the complex financial landscape necessary for the island’s economic recovery.
The ongoing fiscal complexities faced by the Caribbean island and U.S. territory underscore the challenges of balancing fiscal restructuring with economic revitalization. Continued scrutiny from organizations such as Espacios Abiertos is likely as the financial oversight and governance of Puerto Rico remains a contentious and critical issue.
For further details, view the full Bloomberg report.