Rosselló Administration Settles Pension Bondholders' Claim (document)
Rosselló Administration officials reached an agreement with bondholders of the Retirement Systems for them to withdraw their challenge against the PROMESA bill stay, in exchange for the government placing claimed funds on a seprate bank account.
The solution had been signaled in a ruling last January 11th by the First Circuit Court of Appeals in which the judges had sustained the legality of the PROMESA stay. In addition to approving the settlement in the retirement case this afternoon, federal judge Francisco Besosa dismissed without prejudice two other two cases affected by the appeals decision in which groups of bondholders challenged the constitutionality of the stay.
In the case of the pension bondholders, headed by investment group Altair Global Credit Opportunities Fund, the settlement provides that within a period of no more than five days from the transaction, an account will be opened at Banco Popular in which the Retirement Systems Administration will deposit the employers' contributions that were in dispute because Retiro understood that it could put them in its operational expenses account under emergency powers granted during the García Padilla Administration while the bondholders demanded adequate protection of those bonds so they would be available to pay debt from the controversial 2008 bond issue.
The stipulation leaves without effect the hearing that was scheduled for next Friday.