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PREPA bondholders eyeing action against Puerto Rico government
['Southeast Reporter', 'Southeast Reporterrobert Slavin Covers Municipal Finance In The Southeast Region', 'Including Puerto Rico', 'The U.S. Virgin Islands. He Is An...', 'Staff Writer', 'Northeast Reporter', "Senior Reporter For The Bond Buyer'S West Coast Region."]
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PREPA bondholders are trying to get an appeals court to allow them to go after Puerto Rico's central government for actions they say undermined their bonds.
In their brief, the Ad Hoc Group of PREPA bondholders said Puerto Rico pledged in the 1974 Trust Agreement for the bonds, it would not "limit or alter the rights or powers hereby vested in [PREPA] until all such bonds … are met and discharged."
Attorney for the Ad Hoc Group G. Eric Brunstad, Jr. said the bondholders' claim stems from the Puerto Rico central government's wrongdoing and not from bondholders' original bond purchase.
Another judge asked Puerto Rico Oversight Board attorney Mark Harris if he thought there was a distinction between the words "arising from" and "relating to."
Harris said some judges have ruled the former wording is narrower in scope than the latter, but in this case the bondholders' claim was clearly covered.