Puerto Rico fiscal board ordered to submit preliminary avoidance actions next week
UCC has until April 12 to seek avoidance actions trustee
SAN JUAN – U.S. District Judge Laura Taylor Swain granted a request from the Unsecured Creditors Committee and on Friday ordered Puerto Rico’s Financial Oversight and Management Board to submit by April 5 a preliminary list of potential avoidance actions it intends to pursue.
Avoidance actions are typically those in which a trustee rejects or avoids actions taken by the debtor with respect to its property during a specific time before a bankruptcy filing. For instance, a trustee can seek the return of property sold by the debtor if it was sold fraudulently.
Earlier this month, the creditor committee filed a motion urging the court to require the fiscal board to start acting on the avoidance actions before a statute of limitations scheduled for May ran out.
After the board reveals its preliminary list of avoidance actions next week, it must then confer with the UCC about the anticipated allocation of litigation responsibilities, the judge said.
The board must submit then its final list of commonwealth avoidance actions, including designations to the committee by April 10. On April 12, the committee must submit a motion seeking the appointment of a trustee who can assert the avoidance actions. The board has until April 15 to file a motion opposing the trustee.
The board and the committee will file by April 22 a joint status report related to avoidance actions for other debtors.
“The Oversight Board shall file an informative motion disclosing the final list by May 6,” the judge said.