R.I. wins suit brought by Oppenheimer

PROVIDENCE – Rhode Island has defeated a legal challenge from OppenheimerFunds Inc. to its plan to sell $594 million of debt backed by tobacco-company payments.
OppenheimerFunds sued in state court to block the proposal, claiming it illegally diverted at least $20 million from prior bondholders. OppenheimerFunds claimed the deal violated earlier bondholder rights to revenue related to a 16-year-old accord over health care related costs, according to Bloomberg News.
OppenheimerFunds, according to a copy of a complaint, had asked a state court judge in Providence to rule that the plan to allegedly divert at least $20 million from prior bondholders is illegal because the state can’t change the order in which the holders are paid.
Associate Justice Michael Silverstein recently granted a request to dismiss the suit. He said the state and the corporation followed proper procedure for issuance of the new bonds and obtained the appropriate approvals from holders. •

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