Puerto Rico Private Equity Firm’s Cash Deal Prompts Opposition

The largest secured creditor of Puerto Rico-based private equity firm Phoenix Fund LLC objected to the use of a $2.1 million settlement payment, which it claims is its cash collateral.

Investment adviser Brevet Capital Advisors hasn’t consented to the use of its cash collateral from a settlement between Phoenix and José Maldonado Ortiz, owner of real estate company Blue Sky Group LLC, Brevet said Tuesday in the US Bankruptcy Court for the District of Puerto Rico. Such use would violate US bankruptcy law, it argued.

Phoenix filed Chapter 11 in February amid calls from Puerto Rico’s financial regulator to liquidate ...