The Commonwealth of Puerto Rico and other related entities have filed petitions for relief under title III of the Puerto Rico Oversight, Management, and Economic Stability Act (“PROMESA”).  Title III refers to the section of PROMESA that covers court-supervised restructurings of United States territories and their covered instrumentalities.  A territory that files for protection under title III is allowed to continue to operate and provide services uninterrupted “in the ordinary course.”  Prior to the commencement of the title III cases (described below), the Commonwealth and its instrumentalities incurred over $74 billion in bond debt and there are existing pension obligations of over $48 billion at this time.  There is also more information available regarding title III in the Committee FAQs.

 

May 3, 2017.  The Financial Oversight and Management Board for Puerto Rico (“Oversight Board”) commenced a title III case for the Commonwealth of Puerto Rico.

May 5, 2017.  The Oversight Board commenced a title III case for Puerto Rico Sales Tax Financing Corporation (“COFINA”)

May 21, 2017.  The Oversight Board commenced a title III case for the Puerto Rico Highways and Transportation Authority (“HTA”).

May 21, 2017.  The Oversight Board commenced a title III case for the Employees Retirement System (“ERS”).

June 15, 2017.  The official committee of unsecured creditors’ (the “Creditors’ Committee” or “Committee”) was appointed on June 15, 2017 by the Office of the United States Trustee for the District of Puerto Rico (the “U.S. Trustee”).

June 23, 2017.  An order was entered by Judge Laura Taylor Swain appointing a five person mediation team, whose purpose per the order is to facilitate confidential settlement negotiations of any and all issues and proceedings in the title III cases and proceedings.

June 26-27, 2017.  The Creditors’ Committee selected Paul Hastings LLP as its legal counsel and Zolfo Cooper LLC as its financial advisor.  Subsequently, the Committee selected Casillas, Santiago & Torres LLC as its local counsel.

July 2, 2017.  The Oversight Board commenced a title III case for the Puerto Rico Electric Power Authority (“PREPA”).

August 9, 2017.  The Court approved a stipulation and agreed order approving procedures to resolve the Commonwealth-COFINA Dispute. The order appoints the Creditors’ Committee to serve as the Commonwealth representative to litigate and/or settle the issue of whether the sales and use taxes purportedly pledged by COFINA to secure debt are property of the Commonwealth or COFINA under applicable law (the “Stipulation”). The Stipulation is available in the Key Rulings link on this website.

August 25, 2017.  The U.S. Trustee appoints the Creditors’ Committee as official committee of unsecured creditors in the cases of ERS, HTA, and PREPA, as well as the Commonwealth.  Per the amended notice of appointment filed by the U.S. Trustee, the Creditors’ Committee will not serve as official committee of unsecured creditors in the COFINA case.  The Creditors’ Committee acts as a fiduciary for all general unsecured creditors of the Debtors and its duty is to maximize recoveries for the benefits of all such creditors.