>> Holders of Puerto Rican debt scrambling Thursday, one day after the island filed for what is technically the biggest ever bankruptcy of a local government in US history. Putting the process of figuring out who gets paid and how much into the hands of the court is just the beginning, of what is likely to be a long and difficult process, says Reuters correspondent, Nick Brown.
>> We're not exactly sure how much of Puerto Rico's $70 billion in debt are gonna be included in this filing, but, probably the bulk of it. Well it's gonna be really tough because there are a few different fights that need to had. On the one hand creditors can't agree with each other about who has priority over whom.
You have creditors who's debt is backed by Puerto Rican sales tax, and they think that they have a dedicated lien on that revenue stream. And then you have creditors whose debt is backed by the full faith and credit of the Commonwealth and they say nobody can touch that.
>> And that's just round one of the battle. Round two, the fight over how much money the island should spend to pay off its debts and where that money should come from.>> There are those among the creditor classes who are loathe to even talk about debt cuts, because they feel that Puerto Rico hasn't done enough to cut services and tighten its belts in other areas.
The government on the other hand is saying, look, we have a humanitarian crisis, a real humanitarian crisis. We've already proposed cutting pensions, cutting health care, cutting fringe benefits to workers.>> Puerto Rico is suffering through a decade long recession. Resulting in a massive population flight to the mainland, and for those who remain, 45% live in poverty and 11% are unemployed.
This whole bankruptcy process could take well over a year to work its way through the courts. In the meantime, Puerto Ricans are likely to see living conditions worsen. As officials struggle to find money to pay off what they hope will eventually be a smaller debt and to grow the economy at the same time.