Thursday, May 25, 2017

Gov’t issues agenda of first hearing of Puerto Rico’s bankruptcy process

By on May 16, 2017

SAN JUAN — The government has submitted in U.S. District Court an agenda on the matters that will be discussed Wednesday on the first day of hearings of the bankruptcy petitions filed by the Financial Oversight & Management Board on behalf of the government of Puerto Rico and the Puerto Rico Sales Tax Financing Corp. (Cofina).

First, there will be a status hearing going forward on the debtors’ cases, including expectations as to the timetable for proposing plans, settlement negotiations, and a formal mediation process, followed by a report by the United States trustee on expectations and timetable in the formation of creditor’s committees, according to a document submitted Tuesday.

The discussion will move on to a motion for approval of the Form of Notice of Commencement of Title III Cases. The government is seeking the Court’s approval of the notice to be provided to creditors and other parties in interest notifying them of the commencement of these title III cases and related matters, and approving the manner of service and circulation of such notice.

The government is also seeking an order fixing the dates for the government to submit the creditor matrix and the list of creditors.

Creditors ask court to limit Puerto Rico’s authority over its bank account

Officials are seeking an order fixing June 30, 2017, as the date by which the Debtors must file the creditor mailing matrix and fixing August 30, 2017, as the date by which they must file the full list of creditors with claim amounts. There will also be a discussion on a request for an order to pay Prime Clerk LLC as the official solicitation, notice, and claims agent.

At the center of the hearing, however, are certain matters that creditors are contesting.

The creditors are objecting a government request directing the joint administration, solely for procedural purposes, of the Title III cases of the Commonwealth of Puerto Rico and Cofina as the liens are different. The discussion is expected to take more than an hour.

They also object a request by the government for an order imposing local bankruptcy rules to the Title III cases and other case management items and a request confirming the authority of the banks in which the government has its accounts to continue honoring instructions and payment instruments. The creditors say the banks’ authority should be limited.

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