SAN JUAN, Puerto Rico,
June 18, 2014 /PRNewswire/
-- This morning, Doral Financial Corporation filed papers
appealing a decision by the Court of First Instance in Puerto Rico and asking the Puerto Rico Supreme
Court to assume jurisdiction of the appeal.
"The Department of Treasury's unilateral decision to nullify its
binding agreement with Doral has already caused enormous harm to
Doral, and the possibility that Doral could be forced to defend
that agreement in the Department of Treasury's own administrative
process risks even further harm," said Doral's counsel Matthew McGill, a partner with Gibson, Dunn
& Crutcher.
McGill continued, "Doral is entitled to a court hearing to
determine the validity of the agreement, not biased review by the
very entity that declared the agreement 'null.' We are
hopeful that the Supreme Court will promptly correct the Court of
First Instance's errors so that this dispute can be brought to a
prompt conclusion and the 'binding and final' agreement
upheld."
On Monday, the Court of First Instance issued an opinion
concluding that the Department of Treasury had improperly attempted
to invalidate a binding tax agreement with Doral. According
to the court, the Department of Treasury did not identify a proper
legal basis for invalidating the agreement. Despite this
conclusion, however, the Court of First Instance gave the
Department of Treasury another opportunity to decide whether the
agreement is binding. If the Department of Treasury decides the
agreement is not binding, under the decision by the Court of First
Instance, Doral must litigate that dispute through the Department
of Treasury's own administrative process.
On March 26, 2012, Doral entered
into an agreement with the Department of Treasury, in which the
parties agreed to treat Doral's right to claim approximately
$766 million in deductions over the
next eleven years as equivalent to a tax overpayment of
$229 million. By its terms, the
agreement was "final and conclusive," and could "not be reopened,
annulled, modified, set aside or disregarded" unless specific,
enumerated conditions were satisfied. Nonetheless, on
May 14, 2014, the Department of
Treasury announced that it had declared the agreement "null" and
would refuse to honor (and thus refund) Doral's overpayment.
Previously, Doral has expressed concern over potential
retaliation by state agencies for pursuing its rights to enforce
the 2012 agreement.
Doral Financial Corporation is a bank holding company engaged in
banking, mortgage banking and insurance agency activities through
its wholly-owned subsidiaries Doral
Bank, with operations on the mainland U.S. (New York metropolitan area and northwest
region of Florida) and
Puerto Rico. Doral Financial
Corporation's common shares trade on the New York Stock Exchange
under the symbol DRL. Additional information about Doral Financial
Corporation can be found at www.doralpuertoricofacts.com.
SOURCE Doral Financial Corporation