Monday, July 16, 2018

Puerto Rico creditors file nearly 40,000 proofs of claims

By on July 10, 2018

SAN JUAN – Puerto Rico creditors have filed 39,947 proofs of claims in the commonwealth’s Title III bankruptcy case that are being reconciled with the information the government has.

Filing a proof of claim is important for a creditor to be able to collect. In the case of the Title III bankruptcy case under the federal financial oversight law known as Promesa, the court exempted certain creditors such as bondholders from having to file a proof of claim.

While Caribbean Business could not immediately obtain the combined dollar amount of the claims, sources with direct knowledge of the proceedings were not in agreement, with one estimating these could add up to $70 billion or more, while the other source said these would amount to less.

During the omnibus hearing on June 6, Suzzanne Uhland, of the law firm O’Melveny & Myers, said on behalf of the island’s Fiscal Agency and Financial Advisory Authority (AAFAF by its Spanish acronym) that 17,300 proofs of claims had been received at the time, totaling about $46 billion. She categorized them at the time in bonds (about $38 billion), tax refunds ($400 million), and pension- or retiree-related claims (about $3.4 billion). She said there was an additional $2.8 billion in litigation claims.

At the time, Uhland also said the claims will be easily reconcilable. The island’s fiscal board, together with AAFAF, have been engaged in bringing on claims reconciliation to assist the firm in that process. A request for proposals was underway to help with the claims’ reconciliation.

“We have been working with Paul Hastings and the Creditors’ Committee, as well as with AAFAF, to develop a process that will fit into the concept of the plan of adjustment, which will provide for a low discovery, low litigation type of approach. It will allow for offers to be going back and forth, and if, in fact, there is no resolution, an expedited consideration by an appropriate tribunal to consider those claims,” she said.

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