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Judge consolidates suit filed by holders of retirement system and HTA bonds

By on October 18, 2016

A painting in the likeness of Judge Francisco Besosa is seen in this screenshot of www.prd.uscourts.gov

A painting in the likeness of Judge Francisco Besosa is seen in this screenshot of www.prd.uscourts.gov

SAN JUAN – U.S. District Court Judge Francisco Besosa has consolidated a lawsuit recently  filed by 31 investment funds that hold secured bonds from the Puerto Rico Employees Retirement System (ERS) with two other cases to determine whether cause exists to lift the stay imposed by the Puerto Rico Oversight, Management and Economic Stability Act (Promesa) on legal claims.

Besosa consolidated the case headed by Altair Global Credit Opportunities Fund with the lawsuits filed by Peaje Investments and Assured Guaranty Corp. The hearing on the matter of the stay is to be held Nov. 3.

Peaje Investments and Assured Guaranty Corp. have both sued the government for diverting funds from the Puerto Rico Highway and Transportation Authority.

The lawsuit filed by the investment funds wants employees’ contributions to retirement to be put in a separate account for their benefit. In a lawsuit filed Sept. 21, the plaintiffs said they are aware of the challenges Puerto Rico faces and support the U.S. Congress in addressing the commonwealth government’s fiscal, management and structural problems. They said they intend to work with the board established by the Puerto Rico Oversight, Management and Economic Stability Act to manage Puerto Rico’s finances and renegotiate its public debt.

“However, in the interim, the Commonwealth has failed to recognize the constitutional and contractual rights of Movants and other secured creditors. Movants therefore seek limited relief within the Promesa framework in order to protect their property interests and challenge the improper diversion of their property,” they said.

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