Puerto Rico Bond Suits Start Next Phase of Bankruptcy Case (1)

Puerto Rico’s federal oversight board sued dozens of banks and bondholders to claw back more than $1 billion in fees and interest payments tied to debt the government claims is null and void.

The suits, filed just before a May 2 deadline, escalate the board’s conflict with hedge funds and other investors who hold some $6 billion of Puerto Rico general-obligation debt. The cases are part of an effort by island officials to cancel large chunks of general-obligation bonds issued in 2012 and 2014. The board, and some island creditors, argue the debt was sold after the government overshot its ...