Saturday, May 27, 2023
Home   >   Politics   >   P.R. Politics   >   Mediation team in Puerto Rico’s bankruptcy seeks to retain financial adviser

Mediation team in Puerto Rico’s bankruptcy seeks to retain financial adviser

By on August 14, 2017

SAN JUAN – The Financial Oversight & Management Board for Puerto Rico asked federal Judge Laura Taylor Swain to authorize the employment of Phoenix Management Advisors as financial consultants to the team of judges who are acting as mediators in debt-restructuring efforts between the commonwealth and its creditors.

The fiscal board seeks payment for the boutique firm retroactive to Aug. 4. Subject to the court’s approval, Phoenix would be entitled to receive compensation at the following hourly rates: senior managing directors, $495 to $695; senior advisers, $400 to $650; managing directors, $395 to $525; directors and senior directors, $320 to $450; vice presidents, associates and analysts, $150 to $350; and support staff, $75 – $150.

The advisory would be led by Phoenix’s senior managing director, Martha E. M. Kopacz, who served as financial adviser in the preparation of a plan of adjustment for the city of Detroit and whose name was mentioned as a potential candidate to Puerto Rico’s financial control board.

On June 23, Judge Swain ordered the appointment of a team of mediators, all sitting judges, to facilitate confidential settlement negotiations of any and all issues and proceedings arising in all of the commonwealth’s bankruptcy cases under Title III of Promesa.

The mediation group is led by Barbara Houser, who chairs the Federal Bankruptcy Court for the Northern District of Texas; Thomas Ambro, a judge from the Third Circuit Court of Appeals; Nancy Atlas of the Southern District of Texas Federal Court; Christopher Klein, a U.S. bankruptcy judge in the Eastern District of California; and Judge Víctor Ramos, from the federal court for the Southern District of New York.

[Analysis] Puerto Rico government, its creditors begin mediation process

The mediation team has engaged all creditor groups and held an organizational meeting on July 12. At the meeting, creditors were inquired whether they objected to the retention of a financial adviser for the mediation group, at the debtors’ expense.

“No creditor objected; in fact, many creditors affirmatively stated their desire that the Mediation Team have a financial advisor to assist it in the Title III Cases,” states the document filed Aug. 13.

Phoenix was selected Aug. 4, after the mediation team had interviewed various firms.

“The Mediation Team is familiar with the professional standing and reputation of Phoenix, and selected Phoenix because of its wealth of experience in providing financial advisory services in restructurings and reorganizations across the United States and because it has exemplary qualifications to perform the Services…required by the Mediation Team,” according to the document.

The request notes that the judges in the mediation team have agreed to serve as mediators at no cost to the debtors and will use their own law clerks to assist them.

“Thus, the reasonable fees and expenses associated with Phoenix’s retention are the only costs currently expected to be borne by the Debtors in connection with the Mediation Team’s services in the Title III Cases,” the filing adds.

During the last omnibus hearing held Aug. 8,  Judge Houser explained that the mediation team expected to have a “game plan” this week on the specific issues to be addressed in the process. Within a month, meetings over these issues will kick off, she added.

A breakdown of second omnibus hearing on Puerto Rico’s bankruptcy

You must be logged in to post a comment Login