The Puerto Rico Department of the Treasury said it does not owe Doral Financial Corporation $230 million, as the bank has been claiming.
Doral Financial, parent of Doral Bank, and the Treasury have been arguing about an agreement signed between them in March 2012. Doral has said that because of the agreement, the department owes it a tax refund.
Doral needs to raise substantial capital in the next few weeks, or submit a contingency plan to the Federal Deposit Insurance Corporation to sell, merge or liquidate, according to Moody's Investors Service.
The 2012 agreement is null and void for several reasons, department Secretary Melba Acosta Febo said.
"Doral's request is akin to taking the future depreciation of an asset and having the Treasury Department pay in the present for possible tax savings that may be obtained from that depreciation," Acosta Febo said.
