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  • Writer's pictureThe San Juan Daily Star

Teachers’ groups seek stay pending ruling on debt deal confirmation challenge

Puerto Rico Federation of Teachers President Mercedes Martínez Padilla

By The Star Staff

Teachers’ organizations have asked the Title III court to stay its ruling confirming the debt adjustment plan, which is slated to go into effect in mid-March, until the U.S. First Circuit Court of Appeals rules on their challenge to the confirmation of the debt deal, which would restructure some $33 billion in Puerto Rico debt.

U.S. District Court Judge Laura Taylor Swain on Wednesday scheduled a briefing. She said responsive papers 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.

“This stay is necessary to prevent the appeal from becoming moot and getting dismissed by the Court of Appeals,” attorney Rolando Emmanuelli said in written remarks.

He noted that once the debt adjustment plan goes into effect, no Puerto Rico government entity will be able to remedy the damage.

“After being consummated, the adjustment plan becomes binding for all and prohibits the government from legislating or otherwise altering what is available regarding pensions,” the lawyer said.

The teachers’ organizations that submitted the request were the Puerto Rico Federation of Teachers Inc. (FMPR by its Spanish initials); the Educators (as) Magisterial Group for Democracy, Unity, Change, Militancy and Trade Union Organization Inc. (EDUCAMOS); and the National Union of Educators and Education Workers Inc. (UNETE). Earlier this week, they filed a notice of their appeal.

As part of the debt adjustment plan, the court noted that provisions of commonwealth laws that are inconsistent with the Puerto Rico Oversight, Management and Economic Stability Act, commonly known as PROMESA, are preempted. Such preempted provisions include all laws, rules and regulations, to the extent that they give rise to obligations of the debtors discharged by the plan and the confirmation order pursuant to PROMESA. They also include laws enacted prior to June 30, 2016, to the extent that they provide for transfers or other appropriations after the enactment of PROMESA, including transfers from the commonwealth or any of its instrumentalities to any agency or instrumentality, whether to enable such agency or instrumentality to pay or satisfy indebtedness or for any other purpose, are preempted to the extent inconsistent with the plan’s discharge of the debtor’s obligations.

The teachers contend the scope of the preemption is too broad.

“The Court did not, however, address the depth of the arguments presented in the filings regarding the Oversight Board’s inability to preempt the retirement laws through the plan or confirmation order,” the teachers’ organizations said.

Teachers Federation President Mercedes Martínez Padilla said. “In short, the argument is that the [debt adjustment] plan does not comply with the requirements of PROMESA because it lacks enabling legislation to modify the retirement system.”

“In addition, we are proposing that both the judge and the [Financial Oversight and Management] Board exceeded their powers by trying to legislate through the adjustment plan to displace and modify the laws of the retirement system,” she said. “The motion is a call to paralyze the effectiveness of the plan because it is the only way to avoid the irreparable damage that the consummation of the plan will cause to teachers in the public system.”

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