Puerto Rico Recovery Act May Be Struck Down
“Assured Guaranty Ltd. (NYSE:AGO), MBIA Inc. (NYSE:MBI) and Ambac Financial Group, Inc. (NASDAQ:AMBC) have exposures of $2.6 billion, $2.5 billion and $897.9 million respectively to various Puerto Rico entities that are eligible to restructure under Puerto Rico’s Public Corporations Debt Enforcement and Recovery Act (the Act).
(Read ourarticle on Puerto Rico’s Public Corporations Debt Enforcement and Recovery Act here.)
The Act has been challenged in Puerto Rico’s federal district court by the Franklin and Oppenheimer Funds (Franklin California Tax-Free Trust for the Franklin California Intermediate Term Tax Free Income Fund, et al. v. The Commonwealth of Puerto Rico” Case. No. 14-1518) wherein the plaintiffs seek a declaration that the Act enacted by the Commonwealth of Puerto Rico violated multiple provisions of the United States Constitution.”
Griffith, Saul. Value Walk 18 July 2014.