A Puerto Rico Superior Court refused to hear a suit by Doral Financial against the Puerto Rico Treasury on Monday, according to the Treasury.
But the financial services firm said its challenge to the Treasury remains alive.
Doral is seeking $229 million from the Treasury. The Federal Deposit Insurance Corp. has pressured Doral to find hundreds of millions of dollars of Tier 1 capital in the next few weeks.
The three major ratings agencies have indicated they believe the FDIC will liquidate Doral in the near future.
Doral has over $150 million in outstanding municipal debt, issued through Puerto Rico public conduit entities.
The court said it lacked jurisdiction in the case. Doral had claimed that it had over-paid taxes from 2000 to 2004 and was entitled to a refund.
The court's action means Doral retains the opportunity to challenge the Treasury's decision through an administrative proceeding before the Treasury Department, the corporation said in a news release Tuesday.
The court has suspended case hearings scheduled for Tuesday and Wednesday.
The court is giving the Treasury five days to confirm that its reasons for voiding the Treasury's closing agreement with Doral are among the five provided by the commonwealth's code, according to the Treasury.
