Wednesday, October 16, 2019

Properties Expropriated by HTA Must Seek ‘Lift of Stay’ for Compensation

By on June 24, 2017

SAN JUAN — Thousands of owners of private properties being expropriated for public use are feeling the impact of the bankruptcy petition filed by the Highways & Transportation Authority (HTA) because the public corporation’s compensations are “stayed,” Caribbean Business learned.

On the HTA list of the 20 largest creditors that filed in the petition for Title III bankruptcy in May, the public corporation listed it owed $3.5 million to the San Juan Court secretary. Most of the debt is money owed to individuals or businesses whose properties have been expropriated, according to the Puerto Rico Fiscal Agency & Financial Advisory Authority.

The nature of the cases will not be known until the government presents its matrix list of creditors. However, John Mudd, a bankruptcy lawyer, says they are in the thousands.

The government can sue to expropriate a privately owned property to perform public works. The government deposits with the court what it believes is a fair price for the property.

“When the government filed for petition of bankruptcy, everything was stopped,” Mudd said.

As a result, property owners are not receiving any compensation because the properties are idly sitting there.

“The only recourse the property owner has is to get a ‘lift of the stay’ to receive payment,” Mudd said.

Far right, Carlos Aponte, secretary of the Transportation & Public Works Department. (CB Photo)

Caribbean Business spoke with Carlos Aponte, secretary of the Transportation & Public Works Department, or DACO by its Spanish acronym, to inquire about the problems involving expropriations.

“I cannot talk about the Title III process [of the government’s bankruptcy],” he told Caribbean Business several times during a recent Associated General Contractors activity.

In May, the HTA and Employees Retirement System (ERS) joined the central government—along with general obligations (GOs) and the Sales Tax Financing Corp., or Cofina by its Spanish acronym—as the only credits currently under Title III proceedings, which provide, among other things, for a stay on creditor lawsuits.

At the time, Gov. Ricardo Rosselló said he had requested the Financial Oversight & Management Board initiate Title III proceedings for the HTA and the ERS, which total more than $7 billion in outstanding debt. He said lawsuits filed against the HTA jeopardize its operations, while its creditors also oppose the government’s certified fiscal plan.

The government could not provide a specific list of suits involving expropriations. In the commonwealth financial report issued in December, the government said it was a defendant in some 5,192 lawsuits pertaining to matters incidental to the performance of its operations and debt default. As of June 30, 2016, the commonwealth had listed reported liabilities of about $2.2 billion for awarded and anticipated unfavorable judgments. The amounts claimed as of June 30, 2016 exceed $10.9 billion.

You must be logged in to post a comment Login