Public hearings over Puerto Rico’s budget kick off Wednesday

SAN JUAN — The Puerto Rico Legislature will kick off Wednesday, June 7, public hearings over the commonwealth government’s budget for fiscal year 2018, which begins July 1, the president of the House Treasury Committee, Rep. Antonio Soto, announced Sunday.

The legislative hearings over the proposed $9.562 billion general fund budget—unveiled last week by Gov. Ricardo Rosselló and partially certified on Friday by the island’s financial control board—would run until June 15. With a June 19 initial deadline set by the fiscal board, both chambers would have just over four days to vote and approve the budget bills.

Puerto Rico governor reveals $9.56 billion budget

Rep. Soto said he was confident that the Legislature will comply with the board’s initial delivery deadline, although he warned that if the calendar has to be modified by the seven-member panel created by the federal Promesa law, it must do so.

“The deadlines are not a straitjacket. If [the board] has to change the [calendar], it will change it. But for us, it is not an impediment to the legislative work we are going to carry out,” said the lawmaker, who stressed it is important for the Legislature to approve a spending plan for the government before June 30.

If it fails to do so, the financial control board “has the power under the law to approve its own budget [version],” Rep. Soto later conceded.

The Legislature’s budgetary evaluation process will begin with a meeting Monday, with Rosselló’s fiscal team. On Tuesday, they will hold a meeting with the fiscal board’s technical team, which has been made available to lawmakers, Soto said.

Public hearings—which will be carried out jointly with the Senate—will officially begin Wednesday, when lawmakers will again receive the governor’s fiscal team. By Saturday, the Treasury committees of both chambers expect to have addressed government components related to education, community affairs and public safety, including the University of Puerto Rico (UPR).

On Monday, June 12, public hearings would resume and run through Thursday, June 15, during which time the Legislature expects to hear testimony from the economic development, health, family, labor, transportation, housing, sports, and agriculture departments.

As for the evaluation calendar set forth by Promesa’s financial control board, if the governing body notifies “violations” in the spending plan that the Legislature initially presents by June 19, lawmakers would have until June 26 to correct them and submit a new version of the document. If the discrepancies still exist by the end of Friday, June 30, the financial board would enforce its own budget version.

Rosselló presented Wednesday, May 31, a fiscal 2018 general fund budget that reaches $9.562 billion. Two days later, the document was partially certified by the board, as it only approved the “aggregate spending level.”

The governing body required the Rosselló administration to modify several discretionary spending earmarks for failing to meet the objectives of the commonwealth’s certified fiscal plan. The fiscal panel also requested more evidence on how exactly the government will achieve some of the projected spending cuts.

“Be assured that we are not in a process of confrontation with the board. We are [working] within a framework of collaboration […] There is a completely open channel of communication [with the board],” Rep. Soto said.



Deadline set for delivery of Puerto Rico creditors list

SAN JUAN — Federal bankruptcy Judge Laura Taylor Swain issued an order Thursday authorizing deadlines for the Puerto Rico government to submit detailed information on its creditors, as part of Promesa’s Title III debt-restructuring cases for the central government and Sales Tax Financing Corp. (Cofina by its Spanish acronym).

The island’s financial control board—which represents the commonwealth government as debtor in the process—must deliver the creditor mailing matrix by June 30. Meanwhile, a full creditor list, which must include the value of their claims, must be filed by Aug. 30.

Hearing set in Peaje suit against Puerto Rico Highways Authority

On May 9, the board filed a motion in which it suggested both delivery dates to Judge Swain.

Meanwhile, she also authorized Prime Clerk to act as the solicitation, notice and claims agent for the debtor. With Thursday’s order, the board must make an advance payment of $100,000 to the firm for its services.

Earlier this week, Judge Swain halted until further notice debt payments to Cofina creditors, whose bonds are backed by a portion of the island’s sales and use tax. The money for the payment of this debt would be kept in reserve by the Bank of New York Mellon, Cofina’s trustee.

University of Puerto Rico campus ends strike

MAYAGÜEZ – The conclusion Tuesday of the University of Puerto Rico’s (UPR) Mayagüez campus’ student strike marks the seventh of the educational system’s 11 campuses that have put an end to the mass protest that has kept the semester on hold.

According to Pulso Estudiantil, while students from Bayamón, Humacao and Río Piedras insist on continuing the nearly two-month strike, with the latter demanding negotiation with the university’s board to reopen the campus’ gates, Mayagüez students approved resuming the semester, with 1,868 votes in favor, 952 against, and 67 abstained votes.

The Utuado campus also ended its strike, with 115 votes in favor and 11 against. Meanwhile, the Cayey campus lifted the strike with 503 in favor, 284 against. However, it is still unknown when this campus will resume the semester.

The announcement came about place one day before Gov. Ricardo Rosselló presents the island’s budget.

Students have been protesting $450 million in expected cuts to the public university system since early April. Last week, student representatives convened with members of the Financial Oversight & Management Board to discuss initiatives to reduce the cuts and generate more revenue for the university, but board Chairman José Carrión insisted that the academic community must make “difficult, but necessary choices” and comply with the government’s proposed cuts, which he stressed are not open to negotiation.



Rosselló to present budget before Puerto Rico Legislature 

Gov. Ricardo Rosselló (Felipe Torres/CB)


SAN JUAN – Puerto Rico Gov. Ricardo Rosselló will present the commonwealth government’s budget for fiscal year 2018, which begins July 1, before the Legislature at 5 p.m. Wednesday.

La Fortaleza made the announcement Monday afternoon, only hours after the governor had said at a press conference that he was still waiting for the island’s fiscal control board’s green light to present the government’s spending plan to the Legislature.

House Speaker Carlos “Johnny” Méndez said Tuesday that both legislative chambers will hold joint hearings as part of the budget’s evaluation process. He added that the document complies with the fiscal plan certified by Promesa’s board.

“We have until June 25 to approve measures; we hope to approve the budget sooner, but we won’t  be wearing a straightjacket,” Méndez stated after the legislative leaders’ weekly meeting with the governor at La Fortaleza.

“We are going to work with the governor’s budget,” said Senate President Thomas Rivera Schatz, who added that he works “for the Puerto Rican people, and not the [Promesa’s fiscal] board.”

On May 8, the board requested that the government of Puerto Rico deliver a new version of its budget by May 23. According to the Rosselló administration, it complied with the latest deadline. The fiscal board has until Wednesday to either approve what the executive branch delivered or present its own version of a “compliant budget.”

As of this writing, the board had yet to reply to a Caribbean Business’ written request asking whether it has already approved a budget, so that Gov. Rosselló could present it to island lawmakers.

During his budget message in the House of Representatives, the executive is expected to finally shed light over Puerto Rico’s first budget under the framework of the federal Promesa law, nearly a month after first delivering its first version to the board on April 30.

Lawmakers would have little room to make changes to the budget that the administration presents Wednesday. Moreover, Gov. Rosselló has recently pointed to a transition process, zero-based budgeting method and the parameters established by Promesa as new elements in the preparation of the government’s spending plan.

The governor has also warned that the budget could be subject to claims in “different forums,” referring to the debt-restructuring process underway in federal court between the government and its creditors.

What’s more, it is still unknown when the government will make public the most recent liquidity projections and the timeline to implement the adjustments established in the commonwealth’s certified fiscal plan. Both documents were also submitted to the board on April 30.

Since then, neither the Rosselló administration nor the fiscal board have disclosed the documents, calling them confidential “working documents.”

Financial Oversight Board Approves Puerto Rico Fiscal Plan

(Juan J. Rodríguez/CB)

(Juan J. Rodríguez/CB)

NEW YORK  Promesa’s fiscal control board approved Monday its plan for Puerto Rico: a “progressive” 10% cut to pensions, a $450 million reduction to the University of Puerto Rico (UPR) budget and the approval of revenue measures and spending cuts presented by Gov. Ricardo Rosselló in his revised fiscal plan, which was delivered Saturday.

The board also approved a partial reduction to the workweek of public employees and teachers not including public safety personnelalong with the elimination of the Christmas bonus for thesearguing that without this measure, it could not be possible to guarantee the government would have enough money for the provision of essential services.

To avoid the furlough, the government will have to identify on its next budget—which was required to be delivered April 30 along with a liquidity plan—about $200 million in contingency funds. Moreover, the board will reevaluate the situation in September, when it could modify or eliminate, at the board’s sole discretion, the workweek reduction and the Christmas bonus elimination.

For his part, the governor’s representative to the board, Elías Sánchez, said he is “confident” this will not happen and that it represents a “precautionary measure” in case the government does not achieve the necessary cash flow to ensure essential services.

During its fifth public meeting, which was held in New York City, the financial entity announced what it called amendments to the latest version of the fiscal plan presented by the governor. The board said it reached agreements with the Rosselló administration regarding economic projections and in identifying greater government resources, mainly through an increase to the tax on tobacco products.

The cuts to pensions and the UPR must be carried out on or before fiscal year 2020. In the case of pensions, the board said it still has differences with the government and will therefore work during the next 30 days on a plan.

Pension reform will include moving to a pay-as-you-go system, liquidate assets to finance the benefits due under the previous model; and place all pensioners and public employees in defined-contribution plans, segregating their contributions in individual accounts that would ensure the payment of their future benefits. Moreover, new teachers and police officers would be placed under the Social Security program.

Now that a fiscal plan has been certified, the government will need to deliver a budget on or before April 30 for the board’s approval. Also, negotiations with creditors are set to resume, in a bid to reach consensual deals before the expiration of Promesa’s stay on May 1. What’s more, any future legislation approved by the Puerto Rico government will have to be consistent with the approved fiscal plan. Failure to do so would allow the board to void the measure.

The four-hour meeting was held in the Alexander Hamilton U.S. Custom House, just a few steps from the iconic bull on Wall Street and the same place where the board held its first public meeting Last September.

New York City's Alexander Hamilton U.S. Custom House, where Promesa's fiscal control board is expected to certify a fiscal plan for the island during its fifth public meeting on Monday morning. (Juan J. Rodríguez/CB)

New York City’s Alexander Hamilton U.S. Custom House, where Promesa’s financial control board is expected to certify a fiscal plan for the island during its fifth public meeting on Monday morning. (Juan J. Rodríguez/CB)


Fiscal board asked to give municipalities greater participation

SAN JUAN – Popular Democratic Party Rep. Jesús Manuel Ortiz warned the fiscal control board about not including municipalities in the preparation of the various fiscal plans the administration of Ricardo Rosselló will present it, and requested that municipalities be given access to the debt restructuring tools provided by Promesa.

In a letter sent Thursday to the board’s members, the legislator also raised a red flag about the negative effects that implementing some of the recommendations made by the governing body would have on municipalities, such as reducing the subsidies offered by the central government and increasing real estate taxes.

“Just like the central government and several public entities, municipalities need to benefit from Promesa’s tools to ease their financial burden and reduce their debts. I hope the board will take into account the critical situation of municipal finances and help municipalities to improve the essential services they offer without having to raise taxes,” Ortiz told Caribbean Business.

Municipalities have also seen a decrease in their revenue collections and a loss of access to external financing. In addition, these have a public debt of more than $3.8 billion, including about $2 billion to the Government Development Bank (GDB), and the imminent risk of having to pay pensioners directly, or “pay-as-you-go,” the former Press and Public Affairs secretary under the previous administration explained.

PDP Rep. Jesús Manuel Ortiz (CB file photo)

PDP Rep. Jesús Manuel Ortiz (CB file photo)

In the letter, Ortiz asks the board how it will handle the debt of the municipalities, which the representative believes must be restructured, and suggested that these should have access to Promesa’s debt-restructuring mechanisms, including Title III.

Ortiz also emphasized the importance of including input from the municipalities in the preparation of the various fiscal plans the government is working on, particularly with regard to the GDB, Employees Retirement System, Municipal Financing Authority, Municipal Revenue Collections Center (CRIM by its Spanish acronym) and the central government itself.

“If the government achieves savings and cuts to the debt of these entities but does not pass those savings and reductions on to municipalities, the municipalities would be bearing the weight of the central government’s debts. If municipalities do not also benefit from a significant reduction in their debts they will not be able to continue to provide essential services,” Ortiz explained.

The legislator’s request add to remarks made Thursday by the president of the Puerto Rico Mayors Association, Cayey Mayor Rolando Ortiz Velázquez, who criticized the lack of communication between the administration and municipal leaders in the preparation and delivery of the government’s fiscal plan. The leader of the PDP mayors also warned of consequences if “the fiscal reality” of municipalities is not taken into account.

For his part, the lawmaker indicates in his letter to the oversight board that he will be meeting with mayors to urge them to seek legal counsel that puts them in a better position to request from the board access to the various restructuring tools under Promesa. He will also request the Legislature to study alternative funding mechanisms for municipalities.

Fiscal Oversight Board Grants Fiscal Plan, Promesa Stay Extensions

FAJARDO, Puerto Rico – During its fourth public meeting Saturday in Fajardo, Promesa’s fiscal control board approved an extension to both the delivery date of the Puerto Rico government’s fiscal plan as well as well as the stay on litigations provided under the federal statute.

Gov. Ricardo Rosselló’s administration must now hand over a draft fiscal plan on or before Feb. 28, awaiting certification by the board of this document before March 31. The board also established delivery dates for six public entities that must present their fiscal plans individually.

For Rosselló, the board’s determination was “a show of trust” in his administration’s management to date.

At the El Conquistador Resort meeting, where once again strong security measures were put in place, several government officials presented to the board the various fiscal control measures the new administration has already taken.

However, to questions from the press after the meeting ended, the board said it did not have an official position on the recently approved labor reform, nor on the legislation to replace former Gov. Alejandro García Padilla’s debt-moratorium law.

Government officials, alongside their external advisers, Conway MacKenzie, explained that with the extension of the stay on litigation through the beginning of May, there will be sufficient liquidity to keep the government running during the next few months without a need for external financing. However, once the stay expires in May, and absent consensual agreements with its creditors, Puerto Rico could again be facing a $1.3 billion cash shortfall and a possible government shutdown.

It was also revealed that Conway MacKenzie will continue under contract with the government even though it had been hired by the last administration.

Meanwhile, about $470 million is reserved for contingencies, taking into account the several risks the government faces such as the condition of the retirement systems, the depletion of federal healthcare funds under Obamacare, and a looming payment of nearly $400 million to three public funds that lent the government money early in the fiscal year.

On its recommendations made to the Rosselló administration via a Jan. 18 letter, the board reiterated during the meeting the need for debt restructuring along with substantial cuts in government spending, including in healthcare and pensions. However, the board indicated that it was receptive to alternatives pitched by the government if these represent a solution that puts an end to the problem once and for all. The board stressed once again that the government may not seek short-term financing.

During the meeting, the election of former Triple-S Chief Executive Officer Ramón Ruiz Comas as interim executive director of the board was announced, while the search for who will assume the role permanently continues. The board also announced the hiring of Citigroup, which also worked for the past administration, as financial advisers.

In addition, a series of amendments were made to the board’s bylaws–a process in which the attorney who worked on the so-called “ley de quiebra criolla,” or local bankruptcy law, Martin Bienenstock, of the Proskauer Rose law firm was in charge of. These include the incorporation of a code of ethics and the faculty of taking action between meetings with the unanimous consent of its members.

Chairman José Carrión III said he would be presenting the governor, within the next two months, a new list of candidates for revitalization coordinator to choose from. Before exiting La Fortaleza, García Padilla appointed Aaron Bielenberg to that position after having received a list of three candidates from the board.

Essential Services Yet to Be Defined

During the government’s presentation to the board, Government Development Bank President Christian Sobrino said that the legislation substituting the moratorium law provides the legal framework for defining essential government services while assuring payment of the debt.

However, to questions regarding what constitute essential services, the governor’s representative before the board, Elías Sánchez, emphasized that defining these is not an easy process. He also blasted the García Padilla administration for “having spent $400 million on advisers” to supposedly define essential services and had failed in doing so.

The official added that essential services will be defined between members of the Financial Advisory & Fiscal Agency Authority, the local Treasury Department and Office of Management & Budget along with personnel from each of the government’s agencies. Generally, these include the areas of healthcare, security, education and critical infrastructure, Sánchez said.

“Payments for essential services would be current, [payments for] non-essential services would be deferred,” Treasury Secretary Raúl Maldonado added on the matter during the meeting. Some of the board members, including Ana Matosantos, expressed concern over the effect this would have in the accounts payables of suppliers that have delivered services that the administration considers to be non-essential.

GDB President Christian Sobrino and Treasury Secretary Raúl Maldonado (Juan J. Rodríguez/CB)

GDB President Christian Sobrino and Treasury Secretary Raúl Maldonado
(Juan J. Rodríguez/CB)

During the press conference, board members were asked to give their definition of essential services, but they referred the question to government officials.

“We are not the government elected by the people of Puerto Rico, which defines what the essential services are…. The board dictates the number we need to reach to balance the budget,” Carrión said. To this, board member José R. González added that the government must differentiate between “what is aspirational and what is affordable.”

–CB reporter Cindy Burgos Alvarado contributed to this article.

Sources: Bielenberg to Resign from Promesa Post

By Eva Lloréns Vélez and Philipe Schoene Roura

The Puerto Rico Oversight, Management & Economic Stability Act’s (Promesa) revitalization coordinator-designate, Aaron Bielenberg, will likely be leaving the post in the near future citing “family relocation issues,” sources close to the matter told Caribbean Business.

Bielenberg, an infrastructure expert who has vast experience with critical project development and complex financing and corporate transactions, has been a partner at McKinsey & Co.’s Washington, D.C.-based consulting firm since 2013.

The revitalization coordinator is an important post, which includes developing critical infrastructure projects under Title V of Promesa. These duties include responding to comments on projects; addressing Puerto Rico’s difficulties completing major infrastructure projects; and evaluating all projects’ environmental consequences.

Former Gov. Alejandro García Padilla selected Bielenberg as revitalization coordinator, a position created by the federal Promesa law, from a short list in November. Besides Bielenberg, the board’s list also included Joseph Fontana and Riz Shah. Fontana is a partner at Ernst & Young and Shah is with PricewaterhouseCoopers.

All are “good candidates,” Rosselló said, adding, that “without the benefit of sitting down and discussing particular issues, and having a one-on-one with them, it is a bit more complicated to have the elements of judgment.”

If Bielenberg resigns, Hiedrick & Struggles, the firm retained by the control board to search for the executive director, general counsel and the revitalization coordinator, will submit another three names from which the governor will choose.

contractsA confidential document obtained by Caribbean Business lists the following attributes that the revitalization coordinator must possess: A proven track record of outstanding executive performance; professional stature with a reputation beyond reproach with respect to governance and business operating practices; awareness of the relevant business and political dynamics of Puerto Rico but unencumbered by close recent association with either extreme of the current debate; ability and willingness to travel frequently; disposition toward consensus building but willing to advocate for decisions for the good of the territory; fluency with public policy and the intersection of the private and public sectors; an orientation that balances a desire for collaboration with a focus on results; ability to commit to the effort for at least three to five years.

Promesa says the Financial Oversight & Management Board (FOMB) must submit to the governor no less than three nominees for the appointment. The governor has 10 days to select the revitalization coordinator. If the governor fails to make a selection, the board will then appoint the revitalization coordinator by majority vote.

Deadlines loom

Rosselló requested an extension on the delivery of the fiscal plan from Jan. 31 to Feb. 28 and on the stay imposed on liability claims from Feb. 15 to May 1.

The board replied by telling Rosselló about the goals, objectives and parameters that must be included in the new administration’s fiscal plan.

In the letter to the governor, the FOMB outlined five areas that the Rosselló administration must include in its fiscal plan for the government to generate, between now and fiscal year 2019, additional revenue and/or savings totaling $4.5 billion a year.

The five areas include “revenue enhancements” through adjustments to the island’s tax system and improvements in tax administration; “government right-sizing, efficiency and reduction”; reducing healthcare spending; reducing higher education spending; and “pension reform.”

Rosselló replied in a letter to the board last week that its proposals were unacceptable. “It is my view that any fiscal plan premised exclusively on a reduction in the health, well-being and living standards of the people of Puerto Rico through healthcare delivery cutbacks, current retiree pension reductions of our most vulnerable segments of the population and layoffs is by its nature unacceptable,” reads Rosselló’s letter to FOMB Chairman José L. Carrión.

As this newspaper was going to press, the governor’s representative before the oversight board, Elías Sánchez, had sent another letter to its Chairman Carrión in reply to the conditions established by the panel after the government requested an extension to present the fiscal plan.

The official assured the board that Rosselló’s administration was committed to working alongside the FOMB toward developing and approving a fiscal plan that is consistent with requirements established by Promesa, which established the oversight board.

—Luis J. Valentín contributed to this story.

Elías Sánchez says gov’t to spot and hold funds for debt obligations

SAN JUAN – The Puerto Rico government’s representative in the fiscal control board, Elías Sánchez, said Wednesday that the recently introduced Financial Emergency & Fiscal Responsibility Act will change the commonwealth’s public policy—from default to compliance.

However, he conceded that the new law would keep the moratorium on debt payments, although it would be in effect “as long as Promesa’s [stay] lasts.” If the suspension of lawsuits against the government were lifted, the locally established moratorium would be ended, Sánchez assured.

Meanwhile, the official said the “overturn [of] any existing legal structure” isn’t being considered for the moment, after being asked about the Sales Tax Financing Corp. (Cofina) and whether the administration was considering tapping into its debt-service funds.

Elías Sánchez, Gov. Ricardo Rosselló's representative in the Fiscal Oversight Board. (Juan José Rodríguez/CB)

Elías Sánchez, Gov. Ricardo Rosselló’s representative in the Fiscal Oversight Board. (Juan José Rodríguez/CB)

Sánchez further said the bill filed Wednesday seeks to establish a “new public policy” that guarantees essential services, while the rest of the government’s available resources, including the savings achieved in spending, “will be directed toward fulfilling its obligations as debtor.”

As for the executive orders signed by former Gov. Alejandro García Padilla —withholding certain revenue streams that are pledged for debt service—the official said that, due to legal considerations, these will remain in force until they are individually assessed.

“Each of them will be evaluated to see how they can be tempered to the government’s new public policy. That language [in the presented bill] exists so as not to have a situation with legal consequences given [the commonwealth’s prior] defaults,” Sánchez answered Caribbean Business, adding that the short-term liquidity plan will have to be completed before taking action on this end.

That document, which the past administration’s advisory firm Conway MacKenzie is working on, will be presented to the oversight board during Saturday’s meeting. Likewise, any decision to that effect should fall within the fiscal plan that is finally presented, as it is the “basis and foundation of everything,” Sánchez said.

“Due to the defaults that are dragging and which could be liquid and subject to repayment now at the end of the month, it would exceed $1.3 billion, which the government has no way to pay. The government would have to shut down in February,” he said while explaining the reasons why the measure is being presented.

Nevertheless, Sánchez emphasized the goal remains to negotiate and strike agreements outside the courts, which will depend on the creditors’ willingness to sit down at the negotiating table with the different groups of creditors.

Segregating Funds

The government would identify funds and reserve them for honoring debt obligations—be it defaulted payments or any future debt service—but only after earmarking enough resources to cover essential services.

Although the law specifically mentions the idea of having a “lockbox” in which to deposit funds for these services, Sánchez explained that the legislation would also empower the governor to create another dedicated account in which funds may be deposited to pay its creditors when required.

The official noted that funds deposited in such an account would serve to pay what is owed as a result of the various defaults, as well as any future obligation that may arise once a restructuring deal is reached.

Sánchez said the Rosselló administration is still working on estimates of how much money it would be able to reserve, as only the first steps have been taken.

Defining Essential Services

The representative to the board warned that it will not be easy to define the government’s essential services because such priority areas as security, healthcare and wellbeing could include services that are not essential.

Sánchez said that, along with the board, the services provided by government agencies will be assessed with the aim of identifying which ones are essential. Initially, the largest government agencies, comprising nearly 85% of spending, would be subject to evaluation.

“Everything that is not essential…will be directed toward debt service,” Sánchez said.

Additional Powers Would Ensure Compliance

Among the additional powers that would be granted to the governor and the Fiscal Agency & Financial Advisory Authority (FAFAA), Sánchez explained these are tools that allow the governor to ensure compliance with his various executive orders, the fiscal plan and the directives that could be issued by the board.

The official added that currently there are no technological or control systems that allow this to happen, thus the need to provide the governor with such powers.

As for the ability to redirect special funds into the General Fund, or 35% of the government’s revenue, Sánchez said that it seeks to give the local Treasury Department more visibility and control of the commonwealth’s resources. Likewise, he ruled out that this, or any other, provision of the new law is directed at the funds pledged for Cofina.

Oversight Board appeals ruling that barred it from intervening in several lawsuits against commonwealth

SAN JUAN – The Financial Oversight and Management Board has appealed a U.S. District Court ruling that stopped it from intervening in several consolidated suits filed against the government.
The board had filed a motion in October to intervene in four consolidated lawsuits in order to make known its views on the plaintiffs’ pending motions to lift the automatic stay imposed under Section 405 of the Puerto Rico Oversight, Management and Economic Stability Act (Promesa).
Two weeks ago, federal Judge Francisco Besosa denied the board’s request to intervene in the suits filed by U.S. Bank Trust, Brigade Leveraged Capital Structures Fund Ltd, National Public Finance Guarantee Corp. and the Dionisio Trigo group of bondholders.  The plaintiffs were challenging the constitutionality of the Moratorium Act, which stopped payments to bondholders.
On the other hand, Altair Global Credit Opportunities Fund also informed the U.S. District Court Monday that it had appealed a ruling earlier this month that upheld a stay in a lawsuit it filed against the government.
Judge Besosa on Nov. 2 upheld a block on creditors’ ability to file lawsuits against the government of Puerto Rico in an attempt to extract repayment on defaulted bonds to give time to the island to restructure its $69 billion debt load. The stay order was part of the Promesa Act that was signed by President Barack Obama on June 30 and which imposes federal oversight board to deal with Puerto Rico’s debt.

Besosa consolidated the lawsuit filed by Altair with the suits by three other claimants and imposed a stay on them.

“The Court hastens to add that the Commonwealth defendants must not abuse or squander the ‘breathing room’ that the Court’s decision fosters. The purpose of the PROMESA stay is to allow the Commonwealth to engage in meaningful, voluntary negotiations with its creditors without the distraction and burden of defending numerous lawsuits,” Besosa wrote.

Besides Altair, the lawsuit was brought by Peaje Investments LLC and Assured Guaranty Corp against the government and outgoing governor, Alejandro Garcia Padilla.