Puerto Rico Bankruptcy Objections Filed

The Commonwealth of Puerto Rico and its official committee of retired employees of the Commonwealth of Puerto Rico’s filed with the U.S. Bankruptcy Court separate objections to the motion seeking appointment of additional committee of government employees and active pension plan participants or, in the alternative, reconstitution of the retiree committee.

The committee’s objection explains, “Both a motion to direct the appointment of an additional committee and a motion to change the membership of an existing committee require the movant to demonstrate that any existing committee as a whole, or in part, does not adequately represent creditors’ interests.”

The Commonwealth also objected to the ad hoc group of general obligation bondholders’ motion to reconstitute the statutory committee of unsecured claimholders. This objection asserts, “The Motion should be denied. Primarily, as the U.S. Trustee put it in denying the reconstitution of the UCC to include Constitutional Debtholders, creditors asserting secured claims or full priority over other unsecured claims have no place on an existing or separate statutory committee of unsecured claimholders.”

Finally, the Commonwealth objected to the ad hoc municipalities committee’s motion requesting the appointment of an additional committee of municipalities. This objection argues, “The Commonwealth’s critical need for all its components to work together means its components cannot square off against each other like lone rangers with each fighting for its independent glory at the expense of one another. This may sound obvious, but the numerous pending requests for separate statutory committees for different entities and groups show it is not so obvious. Creation of new committees to focus on one group, entity, or issue, rather than the integrated enterprise, imperils the Commonwealth’s survival, just as one would expect when a committee arms itself to pursue one parochial interest at the expense of others.”

BY BRANDY CHETSAS
Puerto Rico Bankruptcy Objections Filed