Appellate Court sides with journalists on hedge fund info
The Center for Investigative Journalism (CPI, as it is known for its initials in Spanish) scored a legal victory in its fight against the government for access to information on the identity of Puerto Rico’s bondholders.
A ruling by the San Juan Court of Appeals reverted a decision by the San Juan Superior Court denying the CPI its petition filed in June 2015 against the Government Development Bank and Gov. Alejandro García-Padilla seeking for details on a the holders of General Obligation debt issued in March 2014. At the time, the government sold $3.5 billion in debt, a historically high issue, as reported.
The CPI asked the government to provide the information they deemed to be public and “necessary to properly oversee the government’s economic and public policy decisions,” the order stated.
Specifically, the CPI and co-defendant Puerto Rico Journalists Association asked for the identities of the hedge funds that bought bonds, the amount of bonds each one picked up, a proposal by the Ad Hoc Group of Bondholders that allegedly established the terms and conditions they set to negotiate with the government and offer the required financing to prevent a default and the shutdown of government operations, and the identity of each of the Ad Hoc group members.
On July 16, 2015, the San Juan Superior Court dismissed the CPI’s petition, based on the argument that the defendants failed to comply with a prior requirement for information related to the identity of the hedge funds and how much each bought. The court also determined that information about the members of the Ad Hoc group was not a public document.
In its resolution, the Appellate Court reverted the case back to the San Juan Superior Court, which must now schedule a hearing during which the government must show reason why the identity of the hedge funds that participated in the March 2014 bond issue should remain under wraps.