Tuesday, March 28, 2023

Judge halts Puerto Rico bankruptcy process for 3 months

By on July 24, 2019

The U.S. District Court for the District of Puerto Rico (CB file photo)

Over 60 organizations made request amid political crisis

SAN JUAN — Amid the recent corruption indictments and uncertainty about the changes in Puerto Rico government administration, combined with the challenge to the constitutionality of the island’s fiscal oversight board, leaders of more than 60 community organizations presented a letter Wednesday to U.S. District Judge Laura Taylor Swain, requesting that the ongoing bankruptcy proceedings over the island’s debt be paused until Puerto Rico stabilizes and a comprehensive audit of its debt has begun.

Judge Swain reportedly granted the petition and halted all adversary cases and claims against the government for 120 days.

“We are facing a historical situation that merits immediately stopping the bankruptcy process. Currently, Puerto Rico does not have enough representatives in this legal process, from a government that has lost all political legitimacy and is about to collapse, to a Fiscal Control Board whose constitutionality is being discussed in the United States Supreme Court. We demand that the bankruptcy case be stopped, as happened after the impact of Hurricane Maria,” the spokeswoman for the “Construyamos otro Acuerdo” (“Let’s Make Another Agreement”), Eva Prados, said in a statement.

The director of Community Campaigns of the Center For Popular Democracy and spokesperson for the Construyamos otro Acuerdo campaign, lawyer Julio López Varona, also emphasized the importance of halting the bankruptcy cases amid uncertainty about who will be the next governor and the representatives of the fiscal board.

“At a time when it is not clear who will be the next governor of the island and the Fiscal Control Board is in a process of being challenged in court, Judge Swain must paralyze bankruptcy proceedings until the country stabilizes. Not taking action would be extremely irresponsible, Puerto Rico deserves a legitimate representative in a bankruptcy process that will have repercussions on the economy and lives of Puerto Ricans for decades.”

The letter’s authors stress that negotiations and the debt adjustment plan should be put on hold and that a comprehensive audit of the public debt must be ordered

“To this leadership crisis, we add that every day we wake up to a new case of corruption and misuse of public funds. That is why we request, more than ever, that a comprehensive audit of the debt be ordered by the Court and that the citizenry and the press be guaranteed access to all documents related to public debt to guarantee the legitimacy of this bankruptcy process,” said Prados, who is also a spokesperson for the Citizen Front for the Audit of the debt.

Joining the release was Sonia Palacios, a retiree and spokesperson for the campaign, who said a central government debt adjustment plan process cannot be allowed “in the face of this clear political crisis.”

“We are talking about a bankruptcy process that will affect the entire country for the next decades and in particular will affect the lives of pensioners and their families. It is irresponsible to continue this legal process until it is known who will govern us in the coming months. We ask Judge Laura Taylor Swain to stop the entire bankruptcy process,” Palacios said.

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