A U.S. federal judge voided a controversial law that allows some of Puerto Rico's public corporations to default on their debt, saying in a ruling late on Friday that the U.S. commonwealth’s “Recovery Act” contravenes federal bankruptcy law, Reuters reported on Friday. The decision in the U.S. District Court has implications for around $20 billion of debt potentially affected under the act.
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The federal judge who ruled that Caribbean resort Scrub Island can leave bankruptcy protection also turned down a request from the resort's lender, FirstBank Puerto Rico, that would have shut the 53-room resort down while another judge reviews the case, Dow Jones Daily Bankruptcy Review reported today.
Doral Financial, the troubled Puerto Rico bank with offices that were raided by the FBI last month, has run afoul with banking regulators over its plans to restore its depleted capital levels, the New York Times DealBook blog reported yesterday. For the second time in a little more than a month, the Federal Deposit Insurance Corp.
Puerto Rico appealed a court ruling that Doral Financial Corp., the holding company for the commonwealth’s second-largest mortgage lender, is entitled to a $229.9 million tax refund from the cash-strapped island’s government, Bloomberg News reported on Saturday.