May 29 deadline set for registering claims against Puerto Rico, gov’t entities
SAN JUAN – U.S. District Court Judge Laura Taylor Swain set May 29 as the deadline for creditors to file proof of claims against the Commonwealth of Puerto Rico and four other government entities that had filed for bankruptcy under Title III of the federal law Promesa.
At the short omnibus hearing Wednesday, where discussion of a commonwealth-proposed $1.3 billion loan to the Puerto Rico Electric Power Authority (Prepa) was on the agenda, the parties decided to make their arguments in a Feb. 15 court hearing in New York as officials withdrew a request for emergency interim financing.
Judge Swain urged all sides, including creditors objecting the loan, to try to reach an agreement by Feb. 15. She said she may or may not decide the issue that day.
Paul Possinger, a lawyer with Proskauer, a firm representing the island’s fiscal oversight board, said the debtors had agreed that May 29 should be the deadline. Judge Swain agreed but urged the parties to launch a stateside and Puerto Rico media campaign to ensure creditors are notified of the deadline. Creditors will also be informed by mail.
Any person or entity whose claim is listed on the Creditor Lists and whose claim is not listed as “disputed,” “contingent” or “unliquidated” will not be required to file a proof of claim. Any person or entity that does not dispute the amount and nature of the claim as it appears in the creditor list does not have to file a proof of claim either.
On Aug. 30, 2017, the commonwealth and its Sales Tax Financing Corp. (Cofina by its Spanish acronym) filed their creditor lists after filing for bankruptcy under Promesa a few months earlier. On Sept. 15, the Government Employees Retirement Systems (ERS) filed its creditor list, while on Dec. 22, 2017, Prepa and the Puerto Rico Highways & Transportation Authority (HTA) followed suit with their respective creditor lists.
The fiscal board had asked Judge Swain to allow indenture trustees, fiscal agents, or any similar agent or nominee or any bond representative to file a master proof of claim on behalf of themselves and all holders of bond claims for the respective series of bonds for obligations arising under their respective trust agreements or bond documents.
The board also said union representatives and credit agreement claimants should also be allowed to file separate master proof of claims on behalf of themselves and all lenders under such agreement.
Persons or entities whose claims were previously allowed by a court order or were paid after the Title III petition was introduced in court; Prepa customers; pension recipients, employees, individual union member claims and individual bondholders are exempted from filing proof of claims, but some lawyers argued they should do file them anyway.
Other matters in the agenda, including an update on the mediation process, were adjourned. Disputed claims were also adjourned as lawyers wanted to continue negotiating on their own instead of seeking the court’s help, said Hermann D. Bauer, a lawyer for O’Neill & Borges.