Sunday, October 22, 2017

Puerto Rico gov’t asks to reschedule bankruptcy hearing, extend deadlines

By on September 25, 2017

SAN JUAN — Due to the damages caused in Puerto Rico by Hurricane María, the government asked Judge Swain to reschedule the Oct. 4 omnibus hearing on the commonwealth’s bankruptcy cases under Title III of Promesa.

According to a motion filed Monday by the Financial Advisory & Fiscal Agency Authority (Fafaa), the commonwealth seeks to reschedule the hearing for Oct. 18. It also intends to move the hearing from the San Juan federal court to the U.S. District Court for the Southern District of New York, “with the hope that an audio or video feed can be made available to participants in Puerto Rico.”

(Juan Rodríguez/CB)

For her part, Judge Laura Taylor Swain—who oversees Puerto Rico’s bankruptcy process—is expected to issue an order on Tuesday over the scheduling issues, according to a notice filed Monday by the court.

Commonwealth counsel, moreover, solicited to extend deadlines related to the next omnibus hearing. Yet, the government “desires to move forward with these Title III cases with as little disruption as possible.”

“[Fafaa] believes that any significant delay in advancing these Title III cases would place a cloud of uncertainty over these proceedings and potentially undermine the progress achieved to date. It is in the best interest of the people of Puerto Rico that these Title III cases continue to progress to provide greater clarity for the future of Puerto Rico, especially as the island turns its focus to rebuilding its infrastructure and long-term economic recovery,” reads the motion.

The U.S. District Court of Puerto Rico. (Juan J. Rodríguez/CB)

The commonwealth proposes that proceedings involving “limited or no factual issues” be decided by Judge Swain on the legal issues and with no delay.

Nevertheless, those matters that involve “factual disputes” could be “temporarily delayed,” according to the commonwealth government. One such matter is the discovery processes that had just commenced as part of the island’s Title III bankruptcy cases.

“Due to the current circumstances in Puerto Rico, [Fafaa] anticipates temporary difficulties in accessing certain physical documents and documents stored electronically that are required to respond to discovery requests. As such, [Fafaa] proposes a modest extension of up to four weeks for all discovery deadlines in these factual dispute cases,” the motion says.

Counsel for different parties had already begun to issue subpoenas and requests for information as part of discovery processes, particularly on the key dispute over the ownership of sales tax revenues, or the so-called Cofina/commonwealth dispute.

Last Wednesday, Hurricane María made landfall in Puerto Rico, leaving thousands without homes, severe damage to infrastructure and virtually no power and telecommunication services.
Prior to the event, a hearing on one of the many adversary proceedings taking place in relation to the commonwealth’s Title III cases, was also postponed due to the emergency.

“[Fafaa] wishes to thank the Court, the Oversight Board, and all key creditor constituencies for their accommodations during this difficult time,” concludes the commonwealth’s motion.

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