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Creditor group seeks to wrest probing power from Puerto Rico board
Source: Reuters
U.S. LEGAL NEWS APRIL 17, 2019 / 5:02 PM / UPDATED 4 HOURS AGO
Creditor group seeks to wrest probing power from Puerto Rico board
SAN JUAN (Reuters) - A group of public labor unions and other creditors on Wednesday asked a judge to grant it power to pursue probes into individuals who contributed to Puerto Rico’s fiscal crisis because the U.S. commonwealth’s federally created financial oversight board has failed to do so.
The Official Committee of Unsecured Creditors, which includes Service Employees International Union, American Federation of Teachers, as well as suppliers and contractors to the Puerto Rican government, said the board recently informed the committee it will not pursue claims against advisers, underwriters and public officials involved in debt sales by the island prior to its May 2017 bankruptcy filing.
“The oversight board has alternated between slow-walking a proper investigation into potential causes of action relating to Puerto Rico’s debt issuances, actively obstructing the committee’s own efforts to investigate the debtors’ prior conduct and indebtedness, and simply allowing causes of action to lapse by failing to anticipate and meet statutory deadlines,” the motion stated.
The committee asked the judge overseeing the island’s bankruptcy to appoint it as a trustee with the power to investigate past debt issuances, as well as pursue fraud, negligence, and breach of fiduciary duty claims against individuals.
-snip-
Creditor group seeks to wrest probing power from Puerto Rico board
SAN JUAN (Reuters) - A group of public labor unions and other creditors on Wednesday asked a judge to grant it power to pursue probes into individuals who contributed to Puerto Rico’s fiscal crisis because the U.S. commonwealth’s federally created financial oversight board has failed to do so.
The Official Committee of Unsecured Creditors, which includes Service Employees International Union, American Federation of Teachers, as well as suppliers and contractors to the Puerto Rican government, said the board recently informed the committee it will not pursue claims against advisers, underwriters and public officials involved in debt sales by the island prior to its May 2017 bankruptcy filing.
“The oversight board has alternated between slow-walking a proper investigation into potential causes of action relating to Puerto Rico’s debt issuances, actively obstructing the committee’s own efforts to investigate the debtors’ prior conduct and indebtedness, and simply allowing causes of action to lapse by failing to anticipate and meet statutory deadlines,” the motion stated.
The committee asked the judge overseeing the island’s bankruptcy to appoint it as a trustee with the power to investigate past debt issuances, as well as pursue fraud, negligence, and breach of fiduciary duty claims against individuals.
-snip-
Read more: https://www.reuters.com/article/us-usa-puertorico/creditor-group-seeks-to-wrest-probing-power-from-puerto-rico-board-idUSKCN1RT2JB