A little more than a week after filing a motion for a temporary restraining order (“TRO”) against the Government Development Bank, a group of creditors owning Puerto Rico bonds confirmed Wednesday they have withdrawn their request.
The petition before the U.S. District Court for Puerto Rico was pulled after Gov. Alejandro García-Padilla signed — a day after the filing — an executive order that largely provides the relief sought in the TRO by stopping non-essential withdrawals or transfers by GDB.
“The executive order provided substantially similar relief to that sought in the TRO request by ordering GDB to honor withdrawals or transfers only if the funds will be used for essential services and only if the depositor expects not to have an alternate source of funds with which to pay for such essential services. The executive order also authorizes GDB to impose weekly limitations of aggregate withdrawals,” the plaintiffs said in a statement issued Wednesday.
Plaintiffs are funds managed or advised by Brigade Capital Management, LP, Claren Road Asset Management, LLC, Fore Research & Management, LP and Solus Alternative Asset Management LP. Plaintiffs are represented by Davis Polk & Wardwell LLP, Vicente & Cuebas and by Ducera Partners, as financial advisor.
“While plaintiffs have serious concerns about the constitutionality and legality of other provisions of the executive order and Puerto Rico Emergency Moratorium and Financial Rehabilitation Act, they hope to continue working with GDB to reach agreement on a long-term solution to its current financial difficulties,” they said in the statement.