Friday, October 22, 2021

Appeals Court Rules Bondholder Information is Public

By on April 18, 2016

SAN JUAN – Three Appeals Court judges ruled in favor of the Center for Investigative Journalism (CPI by its Spanish initials), establishing that the identity of hedge funds that bought Puerto Rico government bonds in the March 2014 issuance and the amount each obtained, as well as the identity of Ad Hoc Group of bondholder members, as well as their terms and conditions, constitute public information.

The lawsuit, filed by the CPI and journalist Joel Cintrón Arbasetti, against the Government Development Bank (GDB) and its president, Melba Acosta, and Gov. Alejandro García Padilla, argued that the information is of “great public interest because the investment firms seeking to collect the debt were trying to influence economic and public policy decisions to ensure their profits, which would mean essential services for the citizens of [Puerto Rico] would be affected due to the government’s lack of liquidity,” a statement issued Monday reads.

“Neither the government nor the court initially wanted to understand the significance of the information requested by the CPI. Today, when we hear expressions by the government regarding the bad faith of some bondholders to negotiate the debt, time has proven us right. It was essential to learn the bondholders’ profile and anticipate the scenarios the country would face. The government itself was an obstacle to us finding learning that information. Hopefully, it is not too late now,” CPI Executive Director Carla Minet stated.

CPI's attorneys Osvaldo Torres Burgos and José Luis Asencio during the hearing at the San Juan Court of Appeals (Erika P. Rodriguez / CPI)

CPI’s attorneys, Osvaldo Torres Burgos and José Luis Asencio, during a hearing at the San Juan Court of Appeals (Erika P. Rodríguez / CPI)

When asked Monday by Caribbean Business on the appellate court’s decision, Public Affairs Secretary Jesús Manuel Ortiz said, “We are an administration of law and order, and if in the end [the court’s ruling] prevails, we would comply with the court’s decision.”

One of CPI’s lawyers, Luis José Torres Asencio, stressed that the panel of judges–Sigfrido Steidel Figueroa, administrative judge of the Court of Appeals; Carlos Vizcarrondo Irizarry; and Luisa Colom García–agreed with the CPI in that “the contracting of third parties for the distribution and sale of bonds issued in March 2014 does not eliminate the public nature of the information requested,” according to the opinion.

“In general, if the opposite were true, the information about transactions or efforts carried out by the government would never be public, specifically when this type of arrangement is used,” Judge Steidel Figueroa’s written opinion reads.

Furthermore, the ruling reads: “The Court of First Instance shall hold an evidentiary hearing in which the state has the opportunity to present what damages would result in disclosing the identity of the hedge funds that participated in the March 2014 issuance, and will evaluate which documents the state has or can obtain without it representing an onerous burden.

“In that hearing, the appeals forum will also pass judgment on the State or the GDB’s disclosure request for documents that are part of the purchase contract and that establish all the terms and conditions of the final government contract. If necessary, these documents may be presented by the appellees in a sealed envelope for the court to evaluate them in advance and take any appropriate precautionary measures.”

CPI attorney Osvaldo Burgos said the judges also “rescued” the definition of public information reiterated in Puerto Rico jurisprudence, which contrasts with the government’s position that it is not public unless written on paper.

“In a public or government context, a document is considered, among other things, ‘any informative material regardless of physical form or characteristics.'” Also, “those generated electronically, even if never printed on paper or other means other than where originally created” the judges wrote.

“The justice system did not allow us to have this information on time. This summer will mark a year since the Center for Investigative Journalism requested this information from the state. But without doubt, the Court of Appeasl vindicates our claim, and we hope the justice system now acts swiftly to produce the information requested,” CPI’s Minet concluded.

The CPI is an independent nonprofit that promotes freedom of information through investigative journalism, education and advocating transparency.

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