Creditors sue to block Puerto Rico development bank withdrawals

Reuters News
Posted: Apr 04, 2016 2:32 PM

SAN JUAN (Reuters) - Creditors of Puerto Rico's Government Development Bank on Monday sued to stop it from distributing money to creditors in what they call "preferential transfers" ahead of the GDB's May 1 debt payment that Puerto Rico's governor says may not be payable.

Hedge funds including Brigade Capital Management and Claren Road Asset Management, who hold some of GDB's $3.75 billion in debt, asked a federal court in San Juan, Puerto Rico, to bar municipalities, public entities and other depositors from removing their money, to prevent a run on the bank.

(Reporting By Nick Brown in San Juan and Jonathan Stempel in New York; Editing by Daniel Bases and Chizu Nomiyama)