REFILE-U.S. judge to join two bond insurer lawsuits against Puerto Rico
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By Tracy Rucinski
CHICAGO Jan 21 (Reuters) - A second lawsuit over Puerto Rico's debt default will be joined with a similar suit in order to save time and money and avoid inconsistent rulings, a U.S. federal judge said on Thursday.
Financial Guaranty Insurance Company, or FGIC, sued Puerto Rico on Tuesday for diverting $164 million in revenue streams meant to pay the island's debt.
The lawsuit mirrored one brought earlier this month by two other bond insurers, Assured Guaranty and Ambac Financial, which argues that the so-called clawbacks violate the U.S. Constitution.
The cases, both filed in U.S. federal court in Puerto Rico, are the first against Puerto Rico since Governor Alejandro Garcia Padilla called the U.S. territory's $70 billion debt load "unpayable" last June.
The governor has said the only way to afford to pay debt backed by Puerto Rico's constitution was to redirect or "claw back" revenues earmarked for debt at other agencies.
"Both cases assert most of the same claims," including the same defendants, U.S. District Judge Gustavo Gelpi said in a court filing.
By joining the two lawsuits, he said the defendants, who include Garcia Padilla and other top Puerto Rican officials, can save money by not going to trial before two different judges. Continuación...