Tuesday, October 16, 2018

Puerto Rico bankruptcy hearing Wednesday to address suits against fiscal board, among other matters

By on July 24, 2018

The U.S. District Court for the District of Puerto Rico (CB file photo)

SAN JUAN – At the omnibus hearing Wednesday, July 25, over Puerto Rico’s insolvency numerous issues will tackled including controversies around the disclosure of documents used by an independent investigator that is probing the causes of the island’s debt; the lawsuit filed by Gov. Ricardo Rosselló amid budget the government’s budget wrangle with the Financial Oversight and Management Board; and a motion to compel the Treasury Department to make certain payments.

The island’s financial oversight board is seeking to dismiss the Rosselló’s complaint to prohibit it from implementing and enforcing certain initiatives through the certified fiscal plan and budget the governor alleges are nonbinding recommendations. He says the board is trying to impose public policy, which is prohibited by Promesa.

At the hearing, the fiscal board also wants a Puerto Rico legislature lawsuit against it dismissed. Lawmakers are requesting a declaration that the board exceeded its authority by attempting to force lawmakers to repeal Act 80, known as the unjust dismissals law, as well as to prohibit the panel from enforcing its own version of the government’s fiscal year budget.

The hearing will start with a status report provided to the fiscal board on the Puerto Rico Electric Power Authority’s (Prepa) operations, leadership,  projected financing needs and claims-filing process.

Afterward, the hearing will move to a Creditors’ Committee Informative Motion seeking the discovery, or the disclosure, of documents obtained by the independent investigator probing the causes of Puerto Rico’s debt.

The investigator wants to obtain approval of procedures to resolve confidentiality disputes and to dispose of the documents once a report is provided next month. The committee, however, appears not to trust the investigator and is seeking to do its own inquiry.

The hearing will also address a request by certain Employees Retirement System bondholders for relief from the automatic stay on litigation established by the Puerto Rico Oversight, Management, and Economic Stability Act (Promesa).

Also, the Retirees’ Committee has filed a motion to compel the Puerto Rico Treasury Department to comply with court orders to pay their legal fees. The committee opposes the island Treasury’s decision to impose a 29% tax for services abroad. Treasury Secretary Raúl Maldonado said he will examine each bill separately to determine whether to deduct the tax. Professionals working with Cofina have a similar request.

The Official Committee of Unsecured Creditors of the Commonwealth of Puerto Rico, as agent of the Commonwealth of Puerto Rico, is also seeking to discuss a renewed motion to establish procedures to deal with the 5.5% sales and use tax revenues, but the matter appears to be uncontested.

image_print

You must be logged in to post a comment Login

-->