Puerto Rico fiscal board picks public debt ‘investigator’
SAN JUAN – Attorney John Couriel, who ran for a Republican seat in the U.S. House of Representatives and now practices with the law firm Kobre & Kim, will lead the Puerto Rico fiscal control board’s efforts related to an investigation of the island’s debt.
Motions filed separately Tuesday evening by the board and a group of government creditors as part of the bankruptcy process under Title III of the Promesa law revealed the selection.
Although Kobre & Kim was hired Sept. 1, it is the first time the body established by the federal law has publicly mentioned the selection of the Miami-based firm.
On Wednesday morning, a statement was then issued saying the board’s special committee for the investigation of the debt retained the firm as the “independent team to carry out a review” of the island’s debt and “its connection to the current fiscal crisis.”
In another motion presented Tuesday, the board defends the experience and independence of the chosen firm, which will report exclusively to the board’s lawyers and its committee to probe the public debt. The special committee is composed of board members Ana Matosantos, Arthur González and David Skeel. Chairman José Carrión, who was originally appointed to the committee, withdrew from it, citing his relationship to Banco Popular.
The document adds that Couriel and Kobre & Kim attorneys have already held meetings with board members, attorneys and consultants and have an initial work plan to conduct the investigation. Likewise, they have reviewed fiscal plans, financial analyzes and debt issuance documents of the government and its instrumentalities, among others.
Couriel and Kobre & Kim’s hiring comes about as a group of creditors is requesting court authorization to conduct a probe into the causes of the island’s fiscal crisis, particularly debt issuances and the role played by Banco Popular, Banco Santander and the Government Development Bank (GDB).
On July 21, the official committee of unsecured government creditors asked the federal court to allow it to conduct an investigation into the public debt. Days later, on Aug. 2, the board announced its intention to initiate a similar inquiry and has since assured it is the entity with authority to conduct it.
Both sides are amid a dispute over an investigation process that is acceptable to all, as was requested by Magistrate Judge Judith Dein during a hearing at the end of August.
The board says its special committee is conducting the investigation “pursuant to the authority granted to the board by Congress and the president” under the Promesa law. The goal, it says, is to have a final report of the public debt’s investigation within the next six months.
The attorneys representing the creditor committee and the firm selected by the board to conduct the investigation will all bill the Puerto Rico government.
Kobre & Kim’s website says Couriel has extensive experience in financial cases and served as assistant U.S. attorney in the criminal division for the Southern District of Florida. He also practiced with Davis Polk & Wardwell, which currently represents a group of GDB creditors.
The financial terms of the contract between the board and the hired firm are not known. A request for further details from a board spokesperson had not been replied to as of this writing.
The board’s special committee, which had issued a request for proposals in August, says in its Wednesday release that it “considers this investigation an integral part of the Board’s mission to restore fiscal balance and economic opportunity and to promote Puerto Rico’s reentry to the capital markets.”
The investigation will include a review of the “fiscal crisis and its contributors, and an examination of Puerto Rico’s debt and its issuance, including disclosure and selling practices,” according to the board.