Teachers’ groups and credit unions appeal Puerto Rico Plan of Adjustment

Credit unions and teachers’ associations separately filed notices of appeal of the court-approved Puerto Rico Plan of Adjustment Friday afternoon.

The teachers’ associations will ask the appeals court to stay implementation of the plan, said Bufete Emmanuelli Partner Jessica Méndez Colberg. In the last week the Oversight Board said it was hoping the plan could be put into effect by March 15.

The credit unions and teachers’ associations filed the notices in the U.S. District Court for the District of Puerto Rico, which approved the plan on Jan. 18. An appeal would be heard by the United States Court of Appeals for the First Circuit in Boston.

The teachers’ associations appealing are Federación de Maestros de Puerto Rico, Inc.; Grupo Magisterial Educadores(as) por la Democracia, Unidad, Cambio, Militancia y Oranización Sindical, Inc.; and Unión Nacional de Educadores y Trabajadores de la Educación, Inc.

The credit unions appealing are Cooperativa de Ahorro y Crédito Abraham Rosa, Cooperativa de Ahorro y Crédito de Ciales, Cooperativa de Ahorro y Crédito de Juana Díaz, Cooperativa de Ahorro y Crédito de Rincón, Cooperativa de Ahorro y Crédito de Vega Alta, and Cooperativa de Ahorro y Crédito Dr. Manuel Zeno Gandía.

By 4:00 p.m. E.S.T. Friday neither group had filed their arguments in the First Circuit court.

However, in November the teachers’ groups said the local law supporting the Plan of Adjustment bars the board from freezing the defined benefit pension amounts for teachers. The board contends if the teachers prevail, the plan would not be affordable.

Bankruptcy Judge Laura Taylor Swain sided with the board, saying the plan allowed the changes to the teachers’ pensions.

The credit unions have argued Puerto Rico’s central government engaged in fraud by pressuring them to buy nearly $1 billion of notes and bonds from various Puerto Rico government entities, many of which have been deeply cut in the current plan and in earlier Puerto Rico restructurings for the Government Development Bank and the Puerto Rico Sales Tax Finance Corp. (COFINA).

There has yet to be deals approved affecting their holdings of Puerto Rico Electric Power Authority and Highways and Transportation Authority securities.

According to Puerto Rico attorney John Mudd, parties have until Tuesday to appeal the Plan of Adjustment.

Appeals of the COFINA restructuring were rejected by the First Circuit largely because they were filed long after the decision and after the new bonds had been issued.