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Puerto Rico’s federally created oversight board believes it can recover payments to bondholders possibly in the billions of dollars if certain debt sold by the bankrupt U.S. commonwealth is found to be invalid, according to a motion filed on Tuesday in federal court, Reuters reported. Critics yesterday called the board’s targeting of bondholder payments another attempt to pressure creditors to settle. The board, which filed bankruptcy for the island in May 2017 to restructure about $120 billion of debt and pension obligations, had sought approval in January to void more than $6 billion of defaulted general obligation bonds sold in 2012 and 2014 on the basis they were issued in violation of debt limits in Puerto Rico’s constitution. Other creditor groups in the bankruptcy are also trying to invalidate pension bonds and debt sold by the island’s Public Buildings Authority. U.S. District Judge Laura Taylor Swain, who is overseeing the bankruptcy, has yet to rule on those requests. The board’s latest filing asks the court to extend a statute of limitations, which expires next month, until there is a ruling on the bonds’ validity and because more time is needed to prepare “potentially hundreds” of lawsuits seeking principal and interest repayments. Judge Swain will address the extension at an April 24 hearing.

Senate Democrats yesterday blocked a Republican disaster aid bill, saying that it doesn’t do enough to help hurricane-torn Puerto Rico, the Associated Press reported. The 44-49 vote fell short of a majority, much less the 60 votes required to overcome a Democratic filibuster. It sent GOP leaders back to the drawing board but seemed unlikely to kill disaster aid efforts outright, since there is much political support to send aid to Southern farmers, wildfire-ravaged California towns and Midwestern flood victims. The $13.5 billion Senate measure mostly mirrors a $14.2 billion measure passed by the House in January, combining aid to Southern farmers, California communities devastated by last summer’s wildfire, and hurricane-hit states such as Florida, Georgia and North Carolina. Hurricane-damaged military bases in Florida and North Carolina would receive rebuilding funds. Democrats want to add almost $700 million more to unlock further disaster aid for Puerto Rico and several states, including help to rebuild badly damaged water systems. Democrats are also trying to force the administration to release billions of dollars in rebuilding funds that have already been approved.

The White House is preparing to ask the Senate to confirm the current members of Puerto Rico’s oversight board, according to people familiar with the matter, a move that would disappoint critics of the U.S. territory’s financial supervisors, WSJ Pro Bankruptcy reported. The Trump administration has begun the process of putting the board’s seven voting members up for a Senate vote, though the nominations aren’t finalized or guaranteed to occur. The move comes in response to a federal appeals court ruling on the board members, who were installed as part of a federal rescue package in 2016 to oversee Puerto Rico’s public finances and renegotiate its debts. The Feb. 15 ruling required Senate confirmation of those serving on the board, throwing its authority into doubt while thrusting the island’s fiscal problems back into Washington’s lap. President Trump and the Senate were given a 90-day deadline by the appeals court to appoint and confirm the current board members or new nominees. The board has spent years at odds with unhappy creditors in the mainland U.S. and elected officials on the island. Some creditors and officials have lobbied since the ruling to fill at least some of the seven slots with new candidates. Bondholders include Aurelius Capital Management LP, a hedge-fund manager that bet big on Puerto Rico and sued the board to argue that its members improperly bypassed the U.S. Constitution’s rules for federal officer appointments. An appeals court in Boston agreed last month, saying that the members must be nominated by the president and confirmed by the Senate.

U.S. District Judge Laura Taylor Swain yesterday granted a request from the unsecured creditors' committee (UCC) that sought to set expedited deadlines for procedures for Puerto Rico to bring avoidance actions in its bankruptcy cases because of a looming deadline, Caribbean Business reported. In a motion filed earlier yesterday, the UCC said that despite repeated request the island’s fiscal oversight board has yet to submit a list of avoidance actions it intends to pursue. The committee asked the court to set Wednesday, March 27, as the deadline to file objections or responses to the Procedures Motion, and March 29 as the deadline to reply. Judge Swain, however, gave the board until March 28 to submit an objection. The UCC can file a report that day as well. The deadline for the commonwealth to file avoidance actions is May 2. The other debtors follow afterward. The board must provide a list by April 1 of the avoidance actions it will pursue. The UCC wants to be allowed to submit a motion seeking the appointment of a trustee to assert avoidance actions.

Investors are hanging on to bonds issued as part of Puerto Rico’s massive restructuring effort, a sign of confidence in the fiscally troubled island’s prospects, the Wall Street Journal reported. Prices have edged higher for $12 billion in new debt backed by sales taxes that Puerto Rico issued several weeks ago. The bonds, known by their Spanish acronym as Cofinas, were issued to investors including hedge funds as part of the U.S. territory’s financial restructuring, marking the first settlement in ongoing negotiations to fix its broken finances. Though the bonds’ prices have pared some of their earlier gains, one slice of newly issued sales tax bonds recently traded with an average price of about $95.44, up from $93.00 last month, according to Refinitiv’s Municipal Market Data.