U.S. District Court Judge Francisco Besosa declined Friday notices of automatic stay filed by Puerto Rico to freeze lawsuits filed by a bondholders group and three firms to invalidate the Puerto Rico Emergency Moratorium and Financial Rehabilitation Act, Caribbean Business reported on Saturday. The commonwealth filed the stay notices for lawsuits filed by National Public Finance Guarantee Corp., Ambac Assurance Corp., Brigade Leveraged Capital Structures and Trigo v. García Padilla against various agencies. The notices were also filed Friday. Judge Besosa ordered the plaintiffs to respond to the notice no later than July 18. “At this time, without the benefit of full briefing by the parties, the Court will not acknowledge that this litigation has been temporarily stayed by the [Puerto Rico Oversight, Management, and Economic Stability Act (PROMESA)],” the judge said in the responses. On June 30, President Obama enacted PROMESA, which puts a temporary moratorium on debt-related litigation against the commonwealth until at least Feb. 15. The plaintiffs are seeking payment alleging that the Moratorium Act violated contractual obligations and is the equivalent of a local bankruptcy law, which is prohibited. Read more.
For more news and analysis of Puerto Rico's debt crisis, be sure to visit ABI's "Puerto Rico in Distress" webpage.
