Fight Over Puerto Rico Debt Heats Up as Creditors Fire Back
- Clash is between general-obligation and sales-tax bondholders
- GO bondholders filed motion to block board’s legal stay
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The hedge-fund fight over Puerto Rico bonds is heating up as two groups of investors accuse each other of wrongdoing.
A day after general-obligation bondholders filed a motion asking the court to deny the federal oversight board’s request for a legal stay, owners of securities backed by sales-tax revenue, known as Cofinas, accused G.O. bondholders of trying to undermine a federal law enacted to shield the island from investor lawsuits. The measure, called Promesa, put a hold on creditor litigation through February, but it hasn’t prevented investors from filing suits to force the island to honor its debts.