Boston, MA 09/23/2014 (wallstreetpr) – Doral Financial Corp. (NYSE:DRL), the second largest mortgage lender reiterated firmly that it owns a $229.9 million tax refund from Puerto Rico government. Back in 2012, both Doral and Puerto Rico came to a consensus that the former is entitled to receive a refund of tax on account of restatement of earnings that occurred between 1998 to 2004. But, the agreement was voided by Puerto Rico’s treasury department claiming that the company made the deal through fraud.
Doral Presses The Refund Demand
Today, the Doral Financial Corp. (NYSE:DRL)’s General Counsel, Enrique Ubarri has stated that after reviewing the refund numbers and agreement with Chief Executive Officer, Glen Wakeman, he concludes that the refund total is correct. Though, the government’s treasury officials continued to reject the claims of Ubarri throughout the trial that took place in front of Superior Court Judge Laureana Perez Perez. Doral Financial Corp. (NYSE:DRL)’s representative said that the failure on the part of Puerto Rico to honor the deal could impact all the existing contracts in between the government and private companies on the island. The warning by Doral piles up on the existing slack economic scenario prevalent in Puerto Rico, which has recorded negative economic growth in five out of seven fiscal years in the past. The government on the island is already trying to cope with the sluggish environment by slashing budgets, freezing salaries of workers and closing down schools in some of the areas. In fact, three of the biggest credit-rating agencies have already cut the debt profile of the island to junk in February this year.
Meanwhile, the justice department highlighted that the witnesses remain firm on their statements that the company has made false representation and the refund amount in question is not supported by evidence. Moreover, the treasury department did not move from their view that there were no overpayments of taxes and thus, there is no question of refund. The judge has given five days to each party to complete the filing of their final arguments, after which Perez will pass a written ruling.