Questions presented
SCOTUS records, cert granted 4 Dec 2015
Whether chapter 9 of the federal Bankruptcy Code, which does not apply to Puerto Rico, nonetheless preempts a Puerto Rico statute creating a mechanism for the Commonwealth's public utilities to restructure their debts.
Opinion summary
Etalia.ai summary of the majority opinion
The case involved a dispute over the interpretation of certain provisions related to municipal bond funds and their tax-exempt status. The petitioner, Acosta–Febo, challenged the Franklin California Tax-Free Trust on grounds that it misrepresented its investment strategy concerning Puerto Rican bonds. The core issue was whether these representations violated federal securities laws by misleading investors about the risks associated with investing in such bonds given Puerto Rico's financial instability at the time. The Supreme Court examined if there were sufficient disclosures made to investors regarding potential risks and how those might affect returns or principal investments.
Opinion written by Justice Thomas
Decided 13 Jun 2016 · Official report