A U.S. District Court judge on Thursday ruled that bondholders’ claim on the assets of Puerto Rico’s public employee pension system ended when the system filed for bankruptcy in May 2017, Reuters reported. The ruling is a setback for owners of nearly $3 billion of bonds sold by the system after a U.S. Appeals Court in January determined they had a legally enforceable claim as of December 2015 on assets pledged by the pension fund to pay off the debt. But U.S. District Judge Laura Taylor Swain decided the claim on employer contributions to the Employees Retirement System did not extend into bankruptcy. Judge Swain is hearing cases involving the U.S. Commonwealth’s attempt to restructure about $120 billion of debt and pension obligations. After completing restructurings for Puerto Rico’s sales tax-backed debt and its Government Development Bank, the island’s federally created financial oversight board is addressing core government debt. The board recently announced an agreement with a court-appointed committee representing more than 167,000 retirees that includes reductions in certain pension payments. Read more.
The Federal Emergency Management Agency is failing to pay out disaster aid in hurricane-stricken Puerto Rico and struggling to work with the commonwealth's government, according to federal contractors on the ground and the agency’s own internal data, the Washington Examiner reported. FEMA is months behind deadline for disbursing billions in disaster aid owed to the commonwealth government, its towns, and its residents nearly two years after Hurricane Maria struck. Only a fraction of the money approved by Congress through FEMA has been delivered, just $380 million of permanent recovery work, a failure that belies President Trump's complaints that the territory and its 3.2 million U.S. citizens have received too much money. Read more.
