A consortium of vulture funds is suing Puerto Rico in federal court, demanding that the Commonwealth “stop wasting its assets” on payments to local hospitals and schools, until the Financial Control Board (FCB) arrives in September 2016.
According to the lawsuit, Puerto Rico is “brazenly violating the PROMESA legislation,” which “specifically prohibits Puerto Rico” from making these payments until the FCB takes control of the island’s economy.
The case is Lex Claims v. Padilla, 16-cv-02374, U.S. District Court, District of Puerto Rico.
The significance to Puerto Rico is profound: within weeks of the passage of PROMESA, vulture funds are already using it – as legal and federal leverage – to prevent Puerto Rico from paying for schools, medical, police, fire, electrical and water services.
If any of those services lower the profits of the vulture funds, they will sue in federal court to stop them.
THE STONE LION CONNECTION
One of the main plaintiffs in this lawsuit is Stone Lion Capital Partners.
The co-founders of Stone Lion are Alan Jay Mintz and Gregory Augustine Hanley.
Before this, Mintz and Hanley were the co-heads of “Distressed Debt and High Yield Trading” at Bear Stearns.
In other words, Mintz and Hanley were two principal engineers of the 2007 mortgage crisis. At Bear Stearns, they pumped out fraudulent CDSs (credit default swaps) and CDOs (collateralized debt obligations) until the entire US economy became infected with them.
These financial instruments were absolutely toxic: the housing market collapsed and Wall Street required a trillion dollar bailout. As a leader in this fiasco, Bear Stearns also collapsed…and closed its doors forever, in complete and utter disgrace.
Immediately after this disgrace, Mintz and Hanley formed Stone Lion Capital Partners.
STONE LION PARTNERS – DESPERATE FOR QUICK CASH
It’s a new corporate disguise…but the same old Mintz and Hanley.
Just seven months ago, in December 2015, the Wall Street Journal reported a bombshell about Mintz and Hanley and Stone Lion Partners: the firm did not meet the investor payments in its oldest account, and had to “suspend redemption.”
In other words, Stone Lion defaulted. They told their oldest investors, “we’re sorry, but we can’t pay the money we owe you. The gate is down.”
So the founding fathers of Stone Lion…the twin engines of disaster at Bear Stearns… created a new disaster in December 2015.
They paid themselves huge Christmas bonuses…and guaranteed those bonuses, by defrauding their longest-standing investors. Just two weeks before Christmas.
This is the business model, and the sociopathic ethics, that they took to Puerto Rico.
HIRE A BEST-DRESSED PUERTO RICAN
With a liquidity catastrophe in December 2015, Stone Lion stepped up their collection operations in Puerto Rico.
They hired Julio Cabral-Corrada, an ambitious boy all dressed for success…in fact, according to Magacín: La Galería Mas Exclusiva de Eventos Sociales, Julio is one of the “12 Best-Dressed Men in Puerto Rico.”
Julio Cabral-Corrada…the best-dressed vendepátria
Julio is an “investment associate” and “Puerto Rico liaison” at Stone Lion.
He is helping Stone Lion, with their lawsuit against Puerto Rico in federal court.
According to the New York Times, Julio also arranges illegal political contributions – violating federal election law – by charging large “donations” for the opportunity to “meet with Resident Commissioner Pedro Pierluisi.”
SQUEEZE PUERTO RICO…IT’S GOOD TO THE LAST DROP
Stone Lion will hire greasy Puerto Ricans like Julio Cabral-Corrada, to sue and screw their own people.
Now that the U.S. Congress created a financial control board, Stone Lion is already using it – even before any board members are announced – as their personal collection agency.
Because Stone Lion is hungry…no, desperate…for cash.
They will therefore exploit Puerto Rico as much as possible.
They will turn her into a cash cow.
Hospitals…schools…electricity…clean water…these are not the priorities of Stone Lion Capital, or any of the vulture funds that are now suing Puerto Rico.
They want their profits. They want their Christmas bonuses.
Julio wants a new tuxedo.
For a history of the War Against All Puerto Ricans, read the book…
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