Honduras faces bankruptcy from Próspera startup city lawsuit

Honduras is facing significant financial challenges after repealing a law that allowed for special economic zones, leading to a wave of claims from foreign investors. One prominent claim comes from an American company, Próspera, which aims to establish a semi-autonomous city. The Honduran government, already burdened with $16.5 billion in debt and high poverty rates, is unable to meet the investors' demands, which could total $10.775 billion. The situation is further complicated by the historical context of corruption and governance issues, as key leaders involved in the charter cities law have been convicted in U.S. federal court for narco-state activities. The current administration is under pressure from both domestic and international actors, including calls from U.S. Congress members for intervention in the Próspera case. The ongoing dispute highlights the tension between foreign investment interests and local governance, raising concerns about the implications for Honduras' economic stability and sovereignty.