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Holder of $30 million property claim disputes fiscal board findings


U.S. District Court Judge Laura Taylor Swain

By The Star Staff


Sucesión Pastor Mandry Mercado, the holder of an inverse condemnation claim for $30 million filed against the Commonwealth of Puerto Rico for the taking of its property, objected Tuesday to the facts and conclusions of law filed by the Financial Oversight and Management Board in favor of the plan of debt adjustment.


On Nov. 28, the oversight board filed its proposed findings of fact and conclusions of law in favor of the debt deal that would restructure some $33 billion in debt following confirmation hearings that concluded recently.


Sucesión Pastor Mandry Mercado said the findings of fact and conclusions of law don’t address inverse condemnation proceedings, limiting themselves to direct condemnation proceedings.


“There is no factual dispute between the Commonwealth and Sucesión Pastor Mandry Mercado. Their controversy is a matter of law,” the document said. “The Commonwealth contends that the just compensation clause of the Fifth Amendment to the Constitution of the United States of America is trumped by Article I, Section 8 Clause 4 of the Constitution, which grants powers to Congress to issue uniform bankruptcy laws, and under the Commonwealth’s plan of adjustment, the claim can be treated as a general unsecured claim subject to discharge.”


Judge Laura Taylor Swain appeared last week not to be inclined to discharge the government from paying certain eminent domain claims such as the one filed by Sucesion Pastor Mandry Mercado.


To begin with, the Sucesion says the Puerto Rico Oversight, Management and Economic Stability Act, commonly known as PROMESA, is not a uniform bankruptcy law, but rather legislation enacted by Congress for the purpose of attending to Puerto Rico’s financial crisis, which specifically states that it doesn’t abrogate any federal legislation such as the Takings Clause, which bans the taking of property without just compensation.


“In order not to be repetitious, Sucesión Pastor Mandry Mercado adopts by reference herein the arguments establishing that the Claim is not dischargeable under the Plan and must be fully compensated,” the document reads.


Also in the bankruptcy case, Swain denied a request filed by several University of Puerto Rico (UPR) professors who wanted a delay in the approval of the debt deal because of the budget cuts to UPR. Swain said UPR is not a Title III debtor.


The professors stated that the “many attempts to present [their] concerns in the November 9th hearings through the court’s public website were unsuccessful.”


The judge said members of the public may submit correspondence in connection with the debt deal proceedings at any time by emailing the correspondence to SwainDPRCorresp@nysd.uscourts.gov.

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