Zones for Employment and Economic Development were an experimental approach to addressing Honduras’ endemic poverty, violent crime, and corruption established by the country’s government in 2013. Commonly known as ZEDEs (Zonas de Empleo y Desarrollo Económico), they were custom designed to incentivize the creation of charter cities, which would be allowed to operate under their own tax codes, regulatory structures, and legal systems. An antidote to the corrupt and incompetent Honduran state, the theory was that ZEDEs might create a stable legal and political environment to attract foreign investment, provide Hondurans jobs, and increase the country’s tax receipts. But in a surprise decision last month, Honduras’ Supreme Court ruled ZEDEs unconstitutional, prohibiting the creation of new charter cities and implying existing ones could be retroactively declared unconstitutional.

On the heels of former Honduran president Juan Orlando Hernández’s arrest by his political opponents, the Marxist husband and wife duo Manuel Zelaya and Xiomara Castro de Zelaya, the ruling leaves Próspera, a semi-sovereign charter city home to 235 startups, over 950 employees, and 1,700 citizens — and with over $100m in funding from investors — in existential limbo. If the Supreme Court does decide that existing ZEDEs are unconstitutional, the Honduran government could effectively renege on its 50-year legal stability agreement included in the law establishing ZEDEs — and designed to provide investors enough confidence to fund Próspera — leaving the city’s backers founders, backers, startups, residents, and employees high and dry.

Just this week, armed police officers forcefully closed an office building within the Próspera ZEDE, evicting a Texas-based company that employed nearly 40 Hondurans and demanding a $480,000 extortion payment to reopen. The culmination of a decades-long internecine conflict marked by coups, political exiles, drug trafficking, and all-out political warfare, the Honduran government’s new stance on ZEDEs may not only jeopardize hundreds of startups and jobs, but ironically could reintroduce the very political instability the former Honduran government sought to avoid by making ZEDEs legal in the first place. Today, as city founders reel from the Supreme Court’s decision — and the surprise closure of one of their buildings on Wednesday — they continue to wait for the Court to decide if the law underpinning their existence will be deemed unconstitutional.