Scotiabank sues Puerto Rico government
Scotiabank filed a lawsuit against Puerto Rico's government on Wednesday seeking repayment of a multimillion-dollar loan despite a debt moratorium imposed amid an economic crisis.
The Canada-based bank's Puerto Rico operation argued in the filing that the moratorium is unlawful. It said it loaned the island's Metropolitan Bus Authority nearly US$38 million in 2012 and accused the state agency of not making any payments since November 2015.
The lawsuit marks the first time that the United States (US) territory's government is sued over a loan and not over bond payments since the governor declared a US$70-billion public debt unpayable last year.
A spokeswoman for Puerto Rico's Justice Department did not immediately return a message for comment.
The lawsuit is the latest of more than a dozen that Puerto Rico's government faces as it seeks to restructure its public debt.
A federal judge is expected to decide soon whether Puerto Rico will have to pay its debts despite US legislation enacted in June that protects the island from lawsuits through February 2017.