Puerto Rico Regulator Cleared to Pursue Bankrupt Phoenix Fund

Puerto Rico’s financial regulator won its request to continue an enforcement action against the fallen private equity firm Phoenix Fund LLC after it filed for bankruptcy last month.

The automatic stay—an injunction in bankruptcy that prevents most creditors from taking action against a debtor—is inapplicable to the continued prosecution of enforcement actions by the Office of the Commissioner of Financial Institutions, Judge Enrique S. Lamoutte of the US Bankruptcy Court for the District of Puerto Rico wrote in a Wednesday opinion.

The court also determined that the pre-bankruptcy receiver appointed by the regulator has the authority to act as debtor-in-possession ...