The Financial Oversight and Management Board for Puerto Rico filed with the U.S. Bankruptcy Court a motion for entry of order (a) confirming the scope of COFINA and the Commonwealth agents’ authority under the stipulation and order and (b) determining certain claims to exceed the scope of the Commonwealth-Cofina dispute.
The motion explains, “The Oversight Board appointed the Commonwealth Agent and the COFINA Agent (collectively, the ‘Agents’) to answer one narrow question – whether, after considering all procedural and substantive defenses and counterclaims, including constitutional issues, the sales and use taxes purportedly pledged by COFINA to secure debt (the ‘Pledged Sales Taxes’) are property of the Commonwealth or COFINA under applicable law (the ‘Commonwealth COFINA Dispute’). The Oversight Board proposed the appointments for the simple reason that the Oversight Board declined to choose a side in this dispute – not, as the COFINA Agent has suggested, because it believes it has a disabling conflict of interest.”
In addition, “In actuality, both the COFINA Agent and Commonwealth Agent have exceeded the scope of their respective agencies by making claims and seeking relief that go beyond the narrow issue for which they were appointed to resolve – the Commonwealth-COFINA Dispute. The Oversight Board thus seeks an order confirming the scope of the tasks it expressly assigned to its Agents, so the Agents can answer the single question posed to them, through litigation or authorized settlement, and the Oversight Board can then use that answer to carry out its duty to restructure the debts of the Commonwealth and COFINA.”
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