Judge Swain questions need for additional service agent in Title III cases
SAN JUAN — Federal Judge Laura Taylor Swain asked the Financial Oversight & Management Board to explain in writing, no later than June 16, why it wants to hire Epiq Bankruptcy Solutions as service agent for two of the Title III bankruptcy cases, just two weeks after the court approved the hiring of another service agent.
Prime Clerk has been working as service agent in the bankruptcy cases of the commonwealth, the Sales Tax Financing Corp. (Cofina by its Spanish acronym), Highways & Transportation Authority (HTA) and the Employees Retirement System (ERS) since the filing of the petitions in May. Judge Swain officially approved the employment and payment to Prime Clerk on June 1.
On June 9, however, the board asked to retain Epiq Bankruptcy Solutions as service agent for the HTA and the ERS bankruptcy cases. The board wants the contract to be retroactive to May 21, when the HTA and ERS filed their Title III petitions.
“Appointing Epiq as the Service Agent in the HTA/ERS Title III cases expedites the process of seeking relevant parties with motions, responses, notices, complaints and other pleadings filed in such cases,” the board says, adding that the debtors anticipate that the process will require tens of thousands of people and entities to be noticed.
Judge Swain, however, is seeking additional information. “The board is hereby ordered to file a supplemental affidavit no later than 12 p.m. on Friday June 16 explaining the reasons why the board believes it is necessary to retain Epiq while simultaneously retaining Prime Clerk LLC,” the order reads.
The board did not return a request for comment. Both contracts contain pricing schedules for a host of services and the prices appear to be similar, according to an evaluation by Caribbean Business.
The commonwealth’s proposed budget for the next fiscal year, which begins July 1, authorizes $60 million to the oversight board for its operations, an amount that has been criticized as spending cuts and other austerity measures are implemented across all government.