Puerto Rico’s Recovery Act: PREPA Plays For Time

The Commonwealth of Puerto Rico responded yesterday to the lawsuit by the Franklin and Oppenheimer Funds that sought dismissal of the recently legislated Public Corporation Debt Enforcement and Recovery Act (“Act”) as unconstitutional. One of the main claims by the funds was that the operation of the federal Bankruptcy Code could not be usurped by the Commonwealth by creating law for composition of indebtedness that may operate as binding on a creditor without that creditor’s consent. Puerto Rico and PREPA file motions to dismiss Motions to dismiss the funds’ complaint were filed separately by both the Commonwealth of Puerto Rico…