On September 27, 2019, the Financial Oversight and Management Board for Puerto Rico filed its proposed plan of adjustment for the Commonwealth of Puerto Rico (the “Proposed Plan”) and a related disclosure statement, copies of which can be viewed here and here. At this time, the Proposed Plan is only a proposal and has not been approved by the district court.

The Official Committee of Unsecured Creditors (the “Committee”) believes that the Proposed Plan should not and cannot be approved for a number of reasons, including because general unsecured creditors (not including holders of employee and pensions claims) would only receive a distribution of up to 1.8% (according to the Oversight Board) on their allowed claims, while many other creditor groups, including unsecured bondholders, would receive a recovery that is significantly higher (and potentially as high as a full recovery, i.e., 100%). The Committee intends to vigorously oppose the proposed treatment of general unsecured creditors under the Proposed Plan. The Committee will provide updates on its website regarding the Proposed Plan and the confirmation process.

*NOTHING CONTAINED HEREIN CONSTITUTES THE SOLICITATION OF VOTES FOR THE ACCEPTANCE OR REJECTION OF A TITLE III PLAN OF ADJUSTMENT WITHIN THE MEANING OF SECTION 1125 OF THE BANKRUPTCY CODE, AS APPLICABLE TO TITLE III OF PROMESA. NO SUCH SOLICITATION SHALL OCCUR PRIOR TO APPROVAL BY THE COURT, IN ACCORDANCE WITH PROMESA, OF A DISCLOSURE STATEMENT WITH RESPECT TO SUCH TITLE III PLAN OF ADJUSTMENT.