MBIA's NPFGC files adversary complaint in U.S. District Court
National Public Finance Guarantee Corporation, an indirect subsidiary of MBIA Inc., said that National and other creditors have filed an Adversary Complaint in the U.S. District Court for the District of Puerto Rico seeking to compel the Puerto Rico Electric Power Authority to deposit revenues with the bond Trustee as required by the terms of the PREPA Trust Agreement, PROMESA and the U.S. Constitution. "PREPA has a clear and unambiguous legal obligation to turn over pledged revenues to the bond Trustee, and that obligation holds during a Title III proceeding," said Bill Fallon, CEO of National Public Finance Guarantee Corporation. "PREPA's obligation to remit these funds resumed upon PREPA's and the Oversight Board's decisions to walk away from a consensual agreement that was supported by almost 70 percent of its creditors. National intends to hold PREPA accountable for its actions." PROMESA protects revenue bondholders by specifically incorporating the special revenue protections of the U.S. Bankruptcy Code into Title III. These protections guarantee that the Creditor Group receives the benefit of its bargain by protecting its lien after a Title III filing, and by ensuring the payment of debt service on their bonds without interference from the automatic stay.