SAN JUAN, Puerto Rico – A lawsuit filed on behalf of University of Puerto Rico bondholders is asking a federal court to stop the commonwealth from diverting $89 million in tuition and fees that are pledged for bond payments.
It is the latest in a series of legal challenges filed against the Puerto Rican government since it began to restructure its nearly $70 billion in debt in 2014. Officials say they need to use the funds earmarked for bond payments to provide essential services instead amid a deep fiscal crisis.
The lawsuit filed Friday by bond trustee U.S. Bank Trust National Association seeks relief from a new federal law that stays creditor lawsuits.
The University of Puerto Rico has $431.8 million in outstanding bonds and pays $42.6 million annually.