Jenner & Block

First Circuit Affirms Decision Protecting Puerto Rico Pension Assets from Bondholders

The firm won a victory on behalf of retired employees in Puerto Rico when the First Circuit ruled against a group of pension bondholders seeking pension assets and a share of future revenue.  In the case, the firm represents the Official Committee of Retired Employees, the group appointed by the US trustee to represent more than 167,000 government retirees from the Employees Retirement System (ERS) of the Government of the Commonwealth of Puerto Rico in a complex bankruptcy case.  A district court earlier rejected claims by the bondholders of the ERS.  On January 30, 2020, the appellate court affirmed. 

“This ruling not only rejects any claims by the bondholders to assets of ERS received post-petition, but it also should invalidate their purported claims to amounts paid by Puerto Rico’s municipalities and agencies to the central government under the pay-as-you go (PayGo) system, which has been dispensing pension benefits post-petition since July 2017,” Partner Robert D. Gordon said in a statement.  “The ruling should provide meaningful support to Puerto Rico’s restructuring efforts and to the protection of Puerto Rico’s retirees and their retirement benefits.”

In addition to Mr. Gordon, the team includes (alphabetically) Partners Ian Heath Gershengorn, Marc B. Hankin, Lindsay C. Harrison, Richard Levin, Landon S. Raiford, Melissa M. Root and Catherine L. Steege.