Friday deadline set for replies to request to paralyze debt adjustment plan
By The Star Staff
Title III Bankruptcy Judge Laura Taylor Swain gave stakeholders until Friday to file replies to a request by judges and credit unions seeking to paralyze the debt adjustment plan from going into effect on March 15.
The Puerto Rican Judiciary Association last week appealed the confirmation of the debt adjustment plan and sought a stop to the process, arguing that the Puerto Rico Oversight, Management and Economic Stability Act, commonly known as PROMESA, cannot trump the congressional directive to form a Republican form of government that requires judicial independence.
“The Puerto Rico judiciary is the third, co-equal and independent branch of government as mandated by the United States Constitution and the Puerto Rico Constitution, and the Fiscal Plan that the Oversight Board recommended the Government of Puerto Rico adopt, and which was confirmed by this Court on January 18, 2022, is in direct contravention of the United States and Puerto Rico Constitutions, as well as in direct contravention of Puerto Rico Supreme Court precedent in Brau Linares v. E.L.A., 190 D.P.R. 315 (2014), because it purports to reduce judicial pensions,” the Association said. “Judicial pensions, once established, must be invulnerable from the legislative and executive branches of government so that judicial power is exercised independently and objectively, without seeking favor or for fear of retribution from the legislative and executive branches.”
In 2016, the oversight board recommended an amendment of the government-proposed draft Fiscal Plan to reduce pensions by fiscal year 2020, judicial branch pensions among them. Specifically, the oversight board provided that the public pension systems, jointly, would absorb a progressive reduction of their outlays by the year 2020 and conditioned its approval of the Fiscal Plan for Puerto Rico on that measure, among other unrelated ones. The oversight board noted that the public pension systems are composed of: Employees’ Retirement System (ERS), Teachers Retirement System (TRS), and Judiciary Retirement System (JRS).
The judges contend that the JRS is completely different from the TRS and the ERS because of its origin in the principle of separation of powers, emanating from the U.S. and Puerto Rico Constitutions.
The credit unions, meanwhile -- Cooperativa de Ahorro y Crédito Abraham Rosa, Cooperativa de Ahorro y Crédito Dr. Manuel Zeno Gandía, Cooperativa de Ahorro y Crédito de Rincón, Cooperativa de Ahorro y Crédito Vega Alta, and Cooperativa de Ahorro y Crédito de Juana Díaz – are appealing a ruling dismissing their suit against the government. The credit unions argued that the government committed fraud to entice them into investing in government bonds knowing that the government was going to default.
Teachers groups are also seeking a stop of the debt adjustment plan in a fight for their pensions. In that case, Swain said responses to the motion for stay pending appeal must be filed by Feb. 9. Any replies must be filed by Feb. 15. The court will then rule on the petition.