Puerto Rico bankruptcy Judge Laura Taylor Swain on Wednesday rejected bond insurers’ continued efforts to lift a stay on the claims for nearly $7 billion in revenue bond debt, The Bond Buyer reported. Swain rejected other arguments to lift the stay or to appoint the insurers as trustee in early July. She said that holders of Puerto Rico Highways and Transportation Authority, Infrastructure and Finance Authority, and Convention Center District Authority bonds didn’t have liens or security interests on money that hadn’t been deposited in the bond payment accounts when the authorities were placed in bankruptcy. In the July 2 decision, she left it to the parties to decide how to handle remaining lines of argument. The sides didn’t reach a consensus, so Swain directed the plaintiffs to submit supplemental briefings in July. On Aug. 11, Judge Swain issued an order rejecting the motions of Assured Guaranty, Ambac Assurance Corp., Financial Guarantee Insurance Company, and National Public Finance Guarantee Corp. made to trustees of the HTA. Since then, according to one attorney, Assured Guaranty submitted an appeal of this decision to the First Circuit Court of Appeals. National, Ambac, and FGIC are co-litigants. It was not yet docketed as of Wednesday. One bond insurer’s lawyer said he expects the insurers to appeal the July 2 decision as well. Judge Swain issued two decisions on Wednesday. In one, she denied the insurers’ stay-relief motions on HTA and PRIFA revenue bonds. She also explained her reasoning for rejecting some of the plaintiffs’ arguments for a lifting of the stay on the CCDA bonds. In the second decision, she denied the motion for a CCDA lift stay for reasons particular to the CCDA bonds.
