Executive Summary

In the Doral saga, the Government, after losing in the Court of First Instance, now argues that pursuant to Law 66-2014, it does not have to pay more than $3 million a year. First, Law 66, called “Special Fiscal Sustainability Act and Government Operations” is not applicable to the judgment since it is not for an amount of money, but rather one that determines that the agreement between Doral and Hacienda is valid and enforceable. Therefore, it does not apply to Doral, but it is likely the PR Treasury will refuse to honor the agreement, forcing the bank to sue it then argue the law applies, although this is a clear abuse of the law.

 Still, Act 66 is clearly unconstitutional. If the Treasury were to pay to the maximum extent permitted by Law 66, or $3 million a year, it would take 76.63 years to extinguish the debt. Moreover, Law 66 violates substantive due process law, impairs contractual obligations in violation of both constitutions, is a seizure of property without just compensation and a violation of the separation of powers between the legislature and the judiciary.

Law 66 English  (document download)