Thursday, March 23, 2023

Former U.S. Bankruptcy Judge: Promesa Not a Solve-All’

By on May 26, 2022

Says Economic Issues Need Attention; Foresees Increase in Filings

From left, former U.S. Bankruptcy Court for the District of Puerto Rico judge Brian K. Tester,
and attorney and certified public accountant, Christian Alcalá.

A former federal bankruptcy judge who is currently involved in Puerto Rico’s bankruptcy-like process said that while the 2016 federal law enacted to address the island’s fiscal crisis will reduce the commonwealth’s unsustainable debt, it will not resolve the island’s core economic and political problems, adding that claim litigations could last for years.

Brian K. Tester, who served as judge at the U.S. Bankruptcy Court for the District of Puerto Rico between 2006 and 2020, said that the debt-restructuring Oversight, Management and Economic Stability Act (Promesa), which created a financial oversight board to negotiate with creditors on behalf of the commonwealth, is “going to do the best it can, but I don’t think it’s going to be a solve-all.”

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