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Wyatt Bondholders sue Central Falls Mayor, City Council and Detention Facility Corporation for $130 million



The lawsuit also seeks to take control of the Wyatt from the Corporation and to reinstate ICE contract.

The individuals named in the suit include Mayor James Diossa, City Councilors Maria Rivera,Jonathan Acosta, Hugo Figueroa, Jessica Vega and Franklin Solano, Corporation Directors Wilder Arborelda, Gary Berdugo, Joseph Molina Flynn, and Herman Yip for “violations of statutory law, common law, and contract, and for declaratory relief. The damages caused by the Defendants’ actions exceed $130 million, plus all costs of collection, including attorney’s fees.”

Saying that the Central Falls Detention Facility Commission (CFDFC), the Central Falls City Council and Mayor Diossa have violated “statutory law, common law, and contract” Attorney Adrienne Walker of the law firm Mintz Levin Cohn Ferris Glovsky and Popeo PC, on behalf on bondholders who have invested in the Wyatt Detention Facility, is suing for $130 million in damages, plus attorneys’ fees and costs.

The lawsuit seems to be in response to the CFDFC’s suspension of its contract with the United States Marshals Service to house ICE detainees, as well as statements from elected City officials critical of the Wyatt and expressing the wish that the Wyatt be closed.

See: Wyatt Board suspends ICE contract for 90 days; Detainees need to be moved out in seven days

The Bondholders are also demanding:

  • that the court grant “a temporary restraining order and thereafter a preliminary injunction” and appoint “a receiver in the manner requested herein and set forth under separate motion”
  • that the court order the appointment of the above-mentioned receiver to foreclose on and take possession of the Mortgage Collateral, and award the Trustee the attorneys’ fees, costs and interest it incurs in enforcing the Bond Documents.
  • that the court order the Corporation to continue its performance of the United States Marshall Service contract to house United States Immigration and Customs Enforcement (ICE) detainees.
  • that the court award the Trustee damages in any amount to be determined at trial, but no less than $130 million dollars and, consistent with the temporary restraining order request, enjoin the City, the Mayor, and the City Council from further interference with the Indenture, USMS Contract, and Mortgage.
  • that the court award the Trustee damages in any amount to be determined at trial.
  • that the court declare that the City Council’s April 3, 2019 resolutions are null and void and have no effect upon the Corporation or its continued existence.
  • that the court award the Trustee such other and further relief as the Court deems just, fair and proper.

You can read the full law suit here.

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The City had previously addressed some of the the bondholder’s concerns and the threat of a lawsuit in a letter to Attorney Walker from their attorney, Nicholas Hemond of DarrowEverett.

Hemond writes that it, “is very clear that these ‘legal claims’ serve only one purpose – to silence the City from speaking out against the unjust treatment of people within the municipal detention facility. If this somehow negatively impacts the bondholders or the market, I suggest that speaks volumes about the nature of the actions of the Wyatt, not the City. The City is within its right to speak out on matters at the Wyatt which, as an ‘instrumentality and agency of the municipality’ directly reflects and negatively impacts the City and its people.”

You can read Hemond’s full letter here.

Hemond goes on to write:

“The recent attempts by the bondholders to back-door a pathway to privatization and the Wyatt’s implementation of the “Southwest Border Zero Tolerance Initiative” authorized by President Trump and then Attorney General Jefferson B. Sessions, without any discussions or conversations was the last straw and inspired legitimate community Outrage and public outcry. This was a decision that was not vetted by the Board of the Corporation nor voted on. Nor were there “good faith” conversations between the parties of the Forbearance Agreement, as had been standard practice. This was a decision made with regard only to income, not with regard to whether these people could be properly or safely housed in the prison with their constitutional due process rights being upheld.

“While the Board of the Corporation may have a duty to continue to plug along at the behest of the bondholders, Mayor Diossa and the members of the City Council have a higher duty – one that is owed to the community that elected them. Mayor Diossa and the Councilmembers have a duty to advocate for the best interests of their constituents. No higher duty exists in our society. Your correspondence is particularly troubling due to the apparent effort of the Trustee to crush the First Amendment rights of City officials and residents speaking out against the continued downward spiral of the Wyatt. As you can see, the City will not be intimidated by these threats intended to impinge the First Amendment rights of its leaders and citizens.”

The plan is to conference the lawsuit in chamber with Rhode Island District Court Judge William Smith tomorrow.

See Providence Journal coverage from Kevin Andrade here.

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Steve Ahlquist is Uprise RI's co-founder and lead reporter. He has covered human rights, social justice, progressive politics and environmental news for nearly a decade.