Latest Case: Pinto Lugo v. Commonwealth of Puerto Rico (Government & Administrative Law)

Pinto Lugo v. Commonwealth of Puerto Rico

Dockets: 19-1181, 19-1160, 19-1182

Opinion Date: February 8, 2021

Judge: William Joseph Kayatta, Jr.

Areas of Law: Government & Administrative Law

In these three consolidated appeals arising out of the Title III debt-restructuring proceedings brought by the Financial Oversight and Management Board (Board) for Puerto Rico on behalf of the Puerto Rico Sales Tax Financing Corporation (COFINA) under the Puerto Rico Oversight, Management, and Economic Stability Act (PROMESA) the First Circuit held that certain appeals were equitably moot and another claim was properly dismissed. The Title III court approved a plan of adjustment (the Plan) proposed by the Board resolving disputes between the Commonwealth of Puerto Rico and COFINA and between the junior and senior holders of COFINA's outstanding debt. The Elliott and Pinto-Lugo groups objected to the Plan, arguing, among other things, that it unlawfully abrogated their rights as junior COFINA bondholders. Peter Hein, an individual creditor, challenged the dismissal of his proof of claim against COFINA. The Title III court dismissed Hein's challenges and overruled the objections to the Plan. On Appeal, the First Circuit (1) dismissed the Elliott and Pinto-Lugo appeals as equitably moot; and (2) affirmed the dismissal of Hein's claims against COFINA.