Another bond insurer has filed a lawsuit against Puerto Rican government officials over how they diverted tax revenues to meet certain bond payments amid an economic crisis.
The lawsuit filed by New York-based Financial Guaranty Insurance Company was consolidated on Thursday with a similar one filed two weeks ago by Assured Guaranty Corp. and Ambac Assurance Corporation.
Financial Guaranty accused U.S. territory government officials of violating the constitution, according to the lawsuit filed Jan. 19. It said that at least $164 million of pledged funds have been diverted for what it called unconstitutional uses. The company said it insures some $1.2 billion of Puerto Rico's debt.
The U.S. territory recently defaulted on $37 million in interest on bonds, and officials have said there is no money available for future payments.
Financial Guaranty said in the lawsuit that the recent default meant the company had to pay more than $6 million in claims.
Puerto Rico is struggling with $72 billion in public debt that the governor has said is unpayable and requires restructuring.
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