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Besosa to Hear Altair’s Claims in Court

By on January 13, 2017

SAN JUAN — U.S. District Court Judge Francisco Besosa will hold a hearing Jan. 20 on a request filed by Altair Global Credit to lift the stay on all liability claims imposed by Promesa, this after the U.S. First Circuit Court of Appeals ordered him to do so.

Altair was one of seven litigants who had asked the court to overturn Besosa’s decision to maintain the stay, which expires next month.

(iStock photo)

(iStock photo)

The Boston court maintained the stay for the claimants, but ordered a hearing into Altair’s claim contending that it should have had a hearing before the judge ordered the stay.

The appeals court also reverted a ruling by Besosa to allow the Puerto Rico Financial Oversight and Management Board to intervene in the cases. The claimants were contending that the stay should have been lifted because they lacked adequate protection.

Altair is seeking protection of its Employee Retirement System (ERS) bonds. During a hearing in Boston earlier this month, Altair lawyers acknowledged that the ERS receives around $18 million a month in contributions that serve as collateral to the bonds.

While the money was not being transferred to the bondholders’ account due to prohibitions established by the Puerto Rico Emergency Moratorium & Financial Rehabilitation Act, it was sitting in an operational account. However, Altair’s lawyers contended that the government had said in its fiscal plan that the money wasn’t safe.

The Boston judges said Besosa erred in denying to lift the stay in the case of the Altair movants without an evidentiary hearing in which they could prove their money was at risk of being depleted.

“The district court erred in finding these future funds sufficient to ensure repayment of the bonds without first holding a hearing,” the court’s statement read.

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