Puerto Rico fiscal board Special Claims Committee selects Brown Rudnick as counsel
SAN JUAN – The Financial Oversight and Management Board for Puerto Rico announced Thursday the selection of Brown Rudnick LLP as claims counsel to assist the panel’s Special Claims Committee in the investigation of potential claims that might arise from the debt investigation report published Aug. 20 by Kobre & Kim.
The move comes a day after the Official Committee of Unsecured Creditors–in all Title III cases, except the Sales Tax Financing Corp.’s, under the Puerto Rico Oversight, Management, and Economic Stability Act (Promesa)–requested discovery to investigate possible claims, arguing that the board had not acted on the matter, three months after announcing it was going to hire a contractor.
At least three of the five debtors in the Title III bankruptcy process, including the government, have until May to submit avoidance claims, in which certain transfers carried out before the bankruptcy filing, such as fraudulent ones, are rejected. The Committee complained that Kobre & Kim failed to investigate if the government has claims toward third parties.
As stated during the request for proposals (RFP) process, the fiscal board reiterated Thursday that the move is “an additional step” taken by its Special Claims Committee “in light of the importance of the debt investigation to evaluate whether the facts found can support the view that any of the parties involved in Puerto Rico’s fiscal crisis committed conduct that is actionable” under the law.
“The Claims Counsel work includes, but is not limited to, review and assessment of the Report and the factual materials that form the basis of the Report, legal research as necessary to advise the Committee regarding potential causes of action and initiation of any litigation arising from the conduct described and/or referrals to prosecutorial or regulatory bodies. All bodies of relevant work will be considered whether or not they are included in the Report,” the board added.
Boston-based Brown Rudnick is an AmLaw 200 firm with offices in the United States London and Paris, with a “reputation as a leading bankruptcy and restructuring practice,” the board said. “Its Bankruptcy & Restructuring Group has successfully represented official committees of unsecured creditors and other key parties in many of the largest and most complex in and out-of-court restructurings. In addition, the firm’s White Collar & Investigations Group has extensive experience doing similar reviews in evaluating litigation claims based on fraud, professional negligence or breach of fiduciary duty, among others.”