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Confirmation hearings for POA start in San Juan of creditors voted in favor, although some of these classes represent bondholders who will see the value of their credit go down with the confirmation of the plan. Other classes —mainly those made up The Weekly Journal Staff of government retirees— will not be affected in light of the changes incorporated into the POA by bout twenty participants Law 53-2021. presented their arguments at Bienenstock said that the FOMB tried to increase the first confirmation hearing the returns that creditors would receive with the of the Government of Puerto restructuring plan and argued that it was not Rico’s Plan of Adjustment possible —under the mandate imposed by the (POA), presided by Judge Laura United States Congress through PROMESA— to Taylor Swain, who directed the provide adequate financing for public pensions. proceedings from the Federal Court, in Hato Rey. Regarding the objection presented by the Puerto The hearing lasted for almost eight hours. Rico Teachers Association (PRTA) on the proposed The parties favoring the confirmation of the POA freeze on educators’ pensions, Bienenstock shared the same conclusion on why they support stressed that the total cost of eliminating this the plan. They described provision would be the plan as “a new $5.6 billion throughout beginning,” “an essential the term of the and monumental step restructuring, until forward,” “the best 2051. possible outcome under That projection the circumstances” was challenged by the and “the resolution PRTA’s, José Luis Berríos, of America’s largest who argued that the municipal debt basis for this calculation restructuring.” is not the current On the other hand, number of participants opponents of the in the retirement plan provided varied systems —between arguments as to why 24,000 and 26,000— the POA should not but rather the number be confirmed, from of 36,000 participants. Judge Laura Taylor Swain. >Carlos Rivera Giusti the alleged special According to Berríos, treatment that bondholders will receive compared taking into account the actual beneficiaries of the to retirees, to the claim from teachers so that their retirement system, the cost figure would be closer pensions do not be frozen. Other opponents of to $2,600 million. the plan stated that their claims do not have to do The lawyer insisted that the FOMB could get the directly with the content of the plan, but with the funds required to eliminate the freeze to teachers effect that its confirmation will have. pensions if it diverted some of the bonds that will However, a few hours after the hearing be paid to creditors, but stressed that even with began, the Government Development Bank for those options, teachers will be worse off under the Puerto Rico’s Debt Recovery Authority —one proposed POA. of the parties that rejected the confirmation of the plan— changed its position after reaching Argues That Plan Alters an agreement with the Financial Oversight and Constitutional Payment Order Management Board (FOMB). The agreement Opposition to the POA was headed by resolves claims filed by the entity against the bondholders Peter Hein and Arthur Samdovitz. government and the Public Buildings Authority Hein, objected to the special treatment given to the for funds historically assigned conditionally to payment of pensions, noting that it is unequal and the Puerto Rico Highways and Transportation unconstitutional. Authority. He based his argument on the Constitution of Puerto Rico, which specifically establishes a Dispute Over Pensions Freeze priority for payment of interest and principal Martin Bienenstock, attorney for the FOMB, for securities, something that, he argued, the began his presentation by highlighting the broad POA contradicts insofar as it guarantees the full support to the POA. He stated that 51 of 71 classes payment of pensions.
They Will Extend for 10 Days
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/ Wednesday, November 10, 2021
Supreme Court weighs in on Puerto Rico´s exclusion from SSI Mark Sherman, The Associated Press
The Supreme Court appeared reluctant Tuesday to rule for a resident of Puerto Rico who claims it’s unconstitutional to be excluded from a welfare program that’s available in all 50 states and the District of Columbia. The justices acknowledged that the differential treatment of Puerto Ricans might be problematic, but several suggested that it is up to Congress, not the courts, to act. Justice Brett Kavanaugh said there are “compelling policy arguments” for including Puerto Rico in the Supplemental Security Income program, which provides benefits to older, disabled and blind Americans. But Kavanaugh said the court had to confront a provision of the Constitution that allows Congress to treat territories and states differently. The Caribbean island has been a U.S. territory since the Spanish American War in 1898. Jose Luis Vaello-Madero, the Puerto Rico resident at the center of the case, began receiving SSI payments after he suffered a series of strokes while living in New York. The payments continued to his bank account in New York even after he moved back to Puerto Rico. When he notified the Social Security Administration, the payments stopped and then the government sued to recover more than $28,000 it said he was not entitled to. Lower courts sided with Vaello-Madero, ruling that the exclusion of Puerto Rico from the SSI program is unconstitutional. In a similar case in Guam, a federal judge ruled recently that residents of that Pacific island also should be able to collect SSI.
Judge Sotomayor Opposes Exclusion
Justice Sonia Sotomayor, whose parents were born in Puerto Rico, was the clearest voice in favor of Vaello-Madero. Sotomayor said it seems irrational to treat poor Americans differently based on where they live.
