U.S. District Judge Laura Taylor Swain granted a motion yesterday that forbids Puerto Rico from using disaster relief money to repay creditors who are owed roughly $72 billion in debt repayments, Reuters reported. The motion, filed by the government of Puerto Rico earlier this month, sought to ensure the money distributed by the Federal Emergency Management Agency in the wake of Hurricane Maria would be reserved for cleanup. Judge Swain granted the motion from the bench during a hearing in New York yesterday, according to court documents. FEMA funds will be used “solely for their intended and required purposes, will be deposited into segregated and non-commingled accounts, and will not be subject to any existing creditor or third-party claims,” the motion said. Read more.
In related news, U.S. officials supervising Puerto Rico’s finances are installing an emergency manager at the island’s public electricity utility, in an attempt to course-correct a disaster response that has come under congressional scrutiny, the Wall Street Journal reported today. Puerto Rico’s financial oversight board is appointing the emergency manager to take over the public electricity monopoly, known as PREPA, with an eye toward its eventual privatization, according to people familiar with the matter. The maneuver would largely wrest control of the utility away from its board of directors and Gov. Ricardo Rosselló. More than a month after Hurricane Maria knocked out power to all of PREPA’s customers, service has been restored to roughly a quarter of them. PREPA’s contracting decisions in the wake of the storm, including its use of a tiny Montana-based firm to rebuild power lines, have raised concerns among members of Congress about the utility’s management. Read more. (Subscription required.)
