Monday, June 1, 2020

Puerto Rico Fiscal Board Rebukes Unsecured Creditors’ Delay Tactics

By on March 28, 2020

Financial Oversight and Management Board members (Juan J. Rodríguez / CB)

As Panel Seeks Hearing, Briefing Deadlines Adjourned Amid Coronavirus Outbreak

SAN JUAN — The Financial Oversight and Management Board blasted the Unsecured Creditors Committee in a filing with the U.S. District Court Friday for attempting to stop all scheduled litigation related to the central government debt deal. 

“The Creditors’ Committee attempts to support its request for a global ‘timeout’ by characterizing the urgent motion as a ‘piecemeal’ approach. But, that is inaccurate. The items which the Creditors’ Committee inappropriately attempts to toss into a heap are separate, litigable issues which must be determined prior to consideration of the plan,” the board said.

Earlier this week, the board asked the court for an adjournment in the consideration of the disclosure statement for the plan support agreement that would reduce $35 billion in central government debt to $11 billion.

The disclosure statement was slated to be considered at a hearing in June. There was no objection to the board’s request but the Unsecured Creditors Committee asked the court to broaden the board’s request to include all litigation around the debt restructuring deal and not just the disclosure statement.

The board said the litigation has been scheduled and coordinated by the Mediation Team head and agreed to by the litigants. Some of this litigation includes motions for stay relief and revenue bond complaints that need to be resolved before the debt adjustment plan is approved by the court. 

On Thursday, the board said it would present a motion in the U.S. District Court for the District of Puerto Rico to adjourn all hearing and briefing deadlines in connection with the Restructuring Support Agreement for the debt of the Puerto Rico Electric Power Authority (PREPA).

“Given the considerable uncertainty about the effect of COVID-19 on Puerto Rico, the Oversight Board continues to believe that the primary focus of the Government and the Oversight Board should be on helping to protect the people from the virus, and to minimize and contain the pandemic. The people of Puerto Rico need ongoing reasonable, comprehensive, and sustainable solutions to this drastic emergency,” the panel said in a statement.

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