Assured Guaranty Municipal and Assured Guaranty Corp., two bond insurance subsidiaries of Bermuda-based re/insurer Assured Guaranty, have voluntarily withdrawn without prejudice their lawsuit challenging the legality of Puerto Rico’s Fiscal Plan as certified by The Financial Oversight and Management Board for Puerto Rico (Oversight Board).
The complaint, filed on May 3, 2017, asserted that the certified fiscal plan violated multiple provisions of PROMESA and the United States Constitution.
“While we continue to believe the current Fiscal Plan is illegal, we have determined to voluntarily dismiss our complaint without prejudice at this time due to the crisis in Puerto Rico following Hurricane Maria, and the high likelihood that the Fiscal Plan will have to be revised,” said Dominic Frederico, president and CEO of Assured Guaranty. “Now is no time to be arguing over these issues, when residents of the island are suffering. The current focus should remain on restoration and relief for Puerto Rico. Additionally, it would be an avoidable misallocation of time, money and judicial resources to litigate issues about a fiscal plan that is expected to change.”
Assured Guaranty said that it urges the Oversight Board to use this opportunity to reset its relationship with creditors, correct the defects in the current fiscal plan and work collaboratively with creditors on a new fiscal plan that complies with the mandatory statutory requirements of PROMESA, the Commonwealth Constitution, and the United States Constitution. Meeting PROMESA’s dual stated purpose of fiscal responsibility and restoration of the Commonwealth’s access to the capital markets has become even more critical in the aftermath of the hurricane damage.
Under applicable law, Assured Guaranty is permitted to refile the lawsuit. If insufficient progress is made in developing a new fiscal plan that complies with PROMESA and respects Assured Guaranty’s constitutional, statutory and contractual rights, Assured Guaranty will refile the lawsuit at an appropriate time.
Assured Guaranty, Puerto Rico, PRHTA Bonds, Puerto Rico Highways and Transportation Authority, Bermuda, North America