Thursday, July 20, 2017

Government moves Bhatia’s suit on budget to bankruptcy court

By on May 12, 2017

SAN JUAN — The government of Puerto Rico transferred to the U.S. Bankruptcy Court on Friday a suit filed by Senate Minority Whip Eduardo Bhatia to compel Gov. Ricardo Rosselló‘s administration to publicize the island’s budget for the next fiscal year.

On May 4, 2017, Bhatia filed a petition for writ of mandamus in the Superior Court in an attempt to compel the government to make public a copy of the budget draft that the Governor’s office provided to the Financial Oversight & Management Board created by the federal Promesa law on April 30, 2017. The government has said the budget is a working document presented before the Board and refuses to make it public.  Meanwhile, the oversight board is verifying whether the local government’s budget must be consistent with its certified Fiscal Plan.

Puerto Rico flooded with lawsuits as Promesa stay ends

In transferring the case to bankruptcy judge Laura Taylor Swain, the government said it must be decided by the bankruptcy court instead of the local courts because the Fiscal Plan that is used to determine the budget is the subject of litigation.

“The Fiscal Plan reflected in the draft budget at issue in the plaintiff’s petition is currently the subject of litigation within the Title III Proceeding. Insurers of Puerto Rico’s general obligation bonds (GOs) filed an adversary complaint in the Title III Proceeding challenging the legality of the Fiscal Plan….Defendants remove this action to the District Court under 48 U.S.C. § 2166, which allows removal of claims over which the District Court has federal subject matter jurisdiction under Promesa to the court in which a Title III Proceeding is pending,” the government’s request said.

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