Puerto Rico Bond Payments Frozen Amid Competing Claims

Law360, New York (May 30, 2017, 10:06 PM EDT) -- Payments on bonds issued by the Puerto Rico Sales Tax Financing Corp. were frozen on Tuesday, just days before a scheduled $16.3 million distribution, as the federal judge overseeing the U.S. territory's restructuring called for more time to sort out conflicting claims of entitlement.

Ruling from the bench in her Manhattan courtroom, U.S. District Judge Laura Taylor Swain ordered that a June 1 disbursement of bonds issued by COFINA be put on hold until litigation over claims linked to the $16 billion worth of bonds issued by the government-owned corporation is resolved.

The decision effectively escrows funds normally paid out to...

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