Assured Guaranty Corp. and Assured Guaranty Municipal Corp. have filed an adversary complaint against Puerto Rico, its governor and the territory's financial oversight and management board after commonwealth unveiled a revised fiscal plan.
In a complaint filed in the U.S. District Court for the District of Puerto Rico, the plaintiffs said the new fiscal plan violates the Puerto Rico Oversight Management and Economic Stability Act, or PROMESA, as well as the U.S. Constitution.
Assured Guaranty argued that the proposal fails to respect lawful priorities and liens established by the constitution, laws, and agreements of the commonwealth, as required by PROMESA. Further violations allegedly include a failure to identify expenses for essential public services, failure to comply with certain sections of PROMESA, and failure to comply with the contracts, takings and due process clauses of the U.S. Constitution.
Assuredy Guaranty is seeking a judgment against the plan and a ruling that the Puerto Rico oversight board cannot use it as the basis for proposing a plan of adjustment in the pending Title III case.
Despite the complaint, the companies' president and CEO, Dominic Frederico, in a statement reiterated his willingness to engage in constructive negotiations to reach a conclusive agreement.