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Public Finance Matters Updates on recent public finance and municipal bond developments

Tag Archives: Puerto Rico

Three Strikes and Recovery Act is Out

Posted in Bankruptcy

By LEN WEISER-VARON and BILL KANNEL Today’s U.S. Supreme Court decision in Commonwealth of Puerto Rico v. Franklin California Tax-Free Trust puts an end to one of Puerto Rico’s multi-pronged efforts to deleverage itself.  Given the comprehensiveness of the First Circuit’s intermediate appellate opinion upholding the district court’s invalidation of Puerto Rico’s Recovery Act, it was… Continue Reading

You Can Lead a Horse to Water, But You Can’t Call it an Airplane: Supreme Court Oral Arguments Suggest Puerto Rico’s Recovery Act May Recover

Posted in Bankruptcy

By LEN WEISER-VARON and BILL KANNEL A few thoughts on Tuesday’s oral arguments before the U.S. Supreme Court in the litigation over whether Puerto Rico’s Public Corporations Debt Enforcement and Recovery Act, an insolvency statute for certain of its government instrumentalities, is void, as the lower federal courts held, under Section 903 of the U.S…. Continue Reading

Draft Treasury Legislation Would Give Puerto Rico Access to “Super Chapter 9” and Chapter 9 Bankruptcy

Posted in Bankruptcy

By LEN WEISER-VARON and BILL KANNEL   A draft of the U.S. Treasury’s proposed debt restructuring legislation began circulating earlier today.  The draft legislation would give Puerto Rico, as well as other U.S. territories, and their municipalities access to U.S. bankruptcy court under a new chapter of the U.S. Bankruptcy Code (so-called “Super Chapter 9”) as well… Continue Reading

Que Certa, Certa: Supreme Court Creates Uncertainty with “Cert” Review of Puerto Rico Recovery Act

Posted in Bankruptcy

By LEN WEISER-VARON, BILL KANNEL and ERIC BLYTHE It is said that muddy water is best cleared by leaving it be.  The Supreme Court’s December 4 decision to review the legality of Puerto Rico’s local bankruptcy law, the Recovery Act, despite a well-reasoned First Circuit Court of Appeals opinion affirming the U.S. District Court in… Continue Reading

First Circuit Hears Oral Arguments on Validity of Puerto Rico’s Recovery Act

Posted in Bankruptcy

By LEN WEISER-VARON and BILL KANNEL A few reactions to today’s oral arguments before the U.S. Court of Appeals for the First Circuit regarding the validity of Puerto Rico’s Recovery Act: On the three judge panel, Chief Judge Lynch seemed prepared to uphold the lower court decision invalidating the Recovery Act; she suggested  that Congress’s amendment of… Continue Reading

PREPA Bondholders Seek Summary Judgment Invalidating Puerto Rico’s Public Corporation Bankruptcy Legislation

Posted in Bankruptcy

By LEN WEISER-VARON and BILL KANNEL On August 11, Franklin Funds and Oppenheimer Rochester Funds filed a second amended complaint, opposition to motion to dismiss and cross-motion for summary judgment in the litigation they previously filed in the United States District Court for Puerto Rico challenging the constitutionality and validity of Puerto Rico’s so-called Recovery… Continue Reading

Puerto Rico and PREPA Seek Dismissal of Bondholder Challenge to Territory’s Bankruptcy Statute

Posted in Bankruptcy

  By LEN WEISER-VARON and BILL KANNEL The Commonwealth of Puerto Rico and the Puerto Rico Electric Power Authority (PREPA) yesterday filed separate motions to dismiss the federal court complaint filed last month by some PREPA bondholders seeking to invalidate the recently-enacted Puerto Rico Public Corporation Debt Enforcement and Recovery Act.  As anticipated, the motions to dismiss… Continue Reading

Puerto Rico Poised to Enact Bankruptcy-Like Legislation for Certain Revenue Bond Issuers

Posted in Bankruptcy

By LEN WEISER-VARON and BILL KANNEL Puerto Rico’s Governor Alejandro Garcia Padilla today introduced debt restructuring legislation which, upon enactment, would provide a judicial debt relief process in Puerto Rico’s courts for certain public corporations, including the Puerto Rico Electric Power Authority (“PREPA”), the Puerto Rico Aqueduct and Sewer Authority (“PRASA”) and the Puerto Rico… Continue Reading

Municipal Bond Market Absorbs Puerto Rico Supreme Court’s Decision that Teacher Pension Reform Legislation is Unconstitutional Contract Impairment

Posted in State Law

BY LEN WEISER-VARON and BILL KANNEL The latest swerve in the rollercoaster that is Puerto Rico public finance occurred on April 11 with the release of the Puerto Rico Supreme Court’s ruling striking down as unconstitutional the bulk of the territory’s teacher pension reform legislation.  The outcome of the case creates some disarray in the… Continue Reading

Legislative Trial Balloon for Puerto Rico Public Corporation Insolvency Process Attracts Bondholder Attention

Posted in Bankruptcy, State Law, Workouts

By LEN WEISER-VARON and BILL KANNEL Last Tuesday, Puerto Rico sold its much-ballyhooed $3.5 billion in non-investment grade general obligation bonds.  Two days later, two legislators in Puerto Rico’s Senate filed a bill which, if enacted, would permit insolvency filings by Puerto Rico’s public corporations in Puerto Rico’s territorial trial court.  The juxtaposition of the two… Continue Reading

Legal Highlights in Puerto Rico’s “Draft POS” for Upcoming General Obligation Bond Issue

Posted in State Law

By LEN WEISER-VARON and BILL KANNEL Although Puerto Rico’s much-discussed sub-investment grade general obligation bond issue is not yet being marketed via an official preliminary official statement, it appears that a draft POS has been making the rounds.  The draft POS, dated February 28, 2014, has been posted on at least one website and has… Continue Reading

Puerto Rico Senate Not in a New York State of Mind?

Posted in State Law

By LEN WEISER-VARON and BILL KANNEL As reported by the Wall Street Journal today and by other sources, the authorizing legislation for Puerto Rico’s much anticipated $3.5 billion non investment grade general obligation issue has become hung up in Puerto Rico’s Senate over language included in the bill passed by the territory’s House of Representatives… Continue Reading

Puerto Rico Bondholders Await Contract Impairment Ruling in Teacher Pension Reform Litigation

Posted in Uncategorized

By LEN WEISER-VARON and BILL KANNEL We previously discussed the Puerto Rico Supreme Court’s decision in the Hernandez case, in which by a 5-4 vote the court upheld the constitutionality under federal and Puerto Rico law of pension reform legislation affecting public sector employees, holding that though such legislation substantially impairs contract rights, the measures are… Continue Reading

Could Bondholders Bring Claims Against Puerto Rico Bond Issuers in Courts Outside Puerto Rico?

Posted in Uncategorized

By Len Weiser-Varon and Bill Kannel As Puerto Rico prepares to access the public markets with a new bond issue, the Wall Street Journal reports that the list of demands from some potential investors include, in addition to a high interest rate and as much security as the issuer can provide, the issuer’s consent to… Continue Reading

Puerto Rico Supreme Court’s Deference to Legislature’s Determinations: A Double-Edged Sword for Puerto Rico Bondholders?

Posted in State Law

By LEN WEISER-VARON and BILL KANNEL The Government Development Bank for Puerto Rico (GDB) hosted an unusual public conference call on October 31 to respond to legal questions raised by investors in bonds issued by the Puerto Rico Sales Tax Financing Corporation, better known by its Spanish acronym, COFINA.  During the one-hour call (which is… Continue Reading