May 09, 2017
Cadwalader is representing Assured Guaranty in connection with Puerto Rico’s restructuring of approximately $73 billion of outstanding bond debt, the largest-ever U.S. municipal debt restructuring and the first bankruptcy of any U.S. territory. Assured is the largest creditor of Puerto Rico, having insured approximately $5.4 billion of the bonds issued by Puerto Rico and its public corporations.
On May 3, on behalf of Puerto Rico, the federal Financial Oversight and Management Board for Puerto Rico (the Oversight Board) filed for bankruptcy protection under Title III of the 2016 Puerto Rico Oversight, Management and Economic Stability Act (PROMESA) in U.S. District Court for the District of Puerto Rico. The Title III case was filed after the expiration of a PROMESA-litigation stay at midnight on May 1 and followed the filing of multiple litigations by several creditors on May 2.
On behalf of Assured, Cadwalader on May 3 filed the first major litigation in the Title III case against Puerto Rico, the Oversight Board, the Governor of Puerto Rico and other Puerto Rican officials. The litigation was filed in response to Puerto Rico’s fiscal plan that violated PROMESA by totally disregarding lawful priorities and liens on special revenues pledged to secure bonds insured by Assured. The adversary complaint alleges that the fiscal plan also violates the U.S. Constitution by substantially impairing the contractual rights of Assured and other bondholders, and by depriving them of property without just compensation or due process of law.
The Cadwalader team is led by Mark Ellenberg and Howard Hawkins and includes partners Lary Stromfeld and Ivan Loncar, special counsel Ellen Halstead, and associates Tom Curtin, Casey Servais, Alejandra Contreras and Katie Riley.
A copy of Assured’s press release can be found here.
Scott Cammarn, Mark Chorazak
Joseph Moreno, Jodi Avergun, Andrew Alin, Joshua Apfelroth, Keith Gerver