Aug. 26 (Bloomberg) -- Doral Financial Corp., the bank seeking a $229 million tax refund from Puerto Rico, fell as much as 20 percent after settlement talks with the island’s Treasury Department broke down.
Doral, which tumbled 47 percent this year through yesterday, declined 15 percent to $7.09 at 9:34 a.m.
Negotiators were unable to reach a definitive settlement and ended the talks yesterday, San Juan-based Doral said today in a regulatory filing. Puerto Rico’s Court of First Instance scheduled a trial starting Sept. 16, according to the filing.
Court-supervised negotiations were under way over Doral’s claims that the island voided a 2012 agreement to pay the tax refund. The Puerto Rican government has maintained that it doesn’t owe the money.
In May, the Federal Reserve Bank of New York told Doral, which hasn’t posted an annual profit since 2005, to write off the refund. The bank said earlier this month it received a subpoena from the Securities and Exchange Commission regarding tax receivables, compliance with a consent order and allowances for loan and lease losses.
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