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T R O U B L E D C O M P A N Y R E P O R T E R
L A T I N A M E R I C A
Friday, May 19, 2023, Vol. 24, No. 101
Headlines
A R G E N T I N A
ARGENTINA: IMF Sees Drought as 'Game-Changer', Massa Says
ARGENTINA: Seeks U.S., Brazil Support for Faster IMF Payouts
B R A Z I L
BRAZIL: Central Bank Keeps Interest Rate at 13.75%
BRAZIL: Industrial Production Grows 1.1% in March, Says IBGE
D O M I N I C A N R E P U B L I C
DOMINICAN REPUBLIC: To Issue Measures in May in Favor of Tourism
E C U A D O R
ECUADOR: IDB OKs $40MM Loan to Revitalize Productivity in Coasts
P U E R T O R I C O
ANOINTED SECURITY: Unsecureds Will Get 1% of Claims in 5 Years
PUERTO RICO: Court Says Immunity Covers Oversight Board
- - - - -
=================
A R G E N T I N A
=================
ARGENTINA: IMF Sees Drought as 'Game-Changer', Massa Says
---------------------------------------------------------
Buenos Aires Times reports that Economy Minister Sergio Massa says
that "everything is on the table" in Argentina's ongoing talks with
the International Monetary Fund, including the bringing forward of
disbursements of funds assigned in the nation's multi-billion-debt
program.
Argentina and the International Monetary Fund are currently
negotiating adjustments to the crisis-hit nation's record
US$44.5-billion extended fund facility deal in the wake of a
historic drought that is set to shave billions of dollars off of
the country's gross domestic product, according to Buenos Aires
Times.
Details of potential changes to the program are few and far
between, though Massa is seeking to bring forward planned
disbursements of funds that could boost Central Bank reserves, the
report notes.
During a press briefing to reporters in Washington, IMF
Spokesperson Julie Kozack gave little away, the report relays.
Responding to questions from journalists, she described the talks
as "constructive" and refrained from detailing key aspects of the
negotiations, the report notes.
"We have been working closely with the Argentine authorities in the
context of the program, to address a very challenging and complex
situation," said Kozack, an ex-deputy director of the IMF's Western
Hemisphere Department and former lead negotiator on Argentina's
record credit-line, the report says.
"Constructive discussions are taking place virtually and we will
communicate the outcome of these discussions," she added.
Pressed once again about the possibility of advancing the scheduled
disbursements outlined in the existing deal and the potential
readjusting of targets on Argentina's fiscal deficit and Central
Bank reserves, Kozack again refused to provide further detail, the
report notes.
The spokeswoman said the deal's next review would take into account
the impact of the drought and seek to strengthen the programme,
adding that the results of the negotiations would be known in the
coming days, the report discloses.
According to Kozack, talks are revolving around targets for the
first quarter of 2023, the fulfilment of which would generate the
next disbursement to Argentina, currently scheduled for June, the
report relays.
Reports in Argentina say the government is requesting that up to
US$10 billion of disbursements be advanced, but that the IMF is
seeking a greater fiscal adjustment and commitments on
interventions to prop up the currency as part of any updated
agreement, Buenos Aires Times says.
The current program is designed in such a way that the multilateral
lender makes disbursements after Argentina has paid down
maturities. Hence if payments are brought forward, it will be
necessary to define how future obligations will be met, the report
relays.
Bloomberg reported that the US President Joe Biden's government is
willing to sign-off on such a deal, the report notes. The United
States is the largest stakeholder on the IMF's board, the report
discloses.
Speaking at AmCham summit in Buenos Aires, Economy Minister Sergio
Massa slipped into a brief bit of English, revealing that IMF staff
had recognised that the punishing drought is a "game-changer" for
Argentina that "forces us to rethink everything," the report
relays.
"We will adjust the program, rather than do a new one and have to
go back" to Congress and the IMF's executive board to receive
approval, Massa told an audience of political and business leaders
in Buenos Aires, the report notes.
Echoing Massa's claim, Kozack said the IMF recognized that the
economic situation had been "exacerbated by the historic drought
that Argentina is facing," the report relays.
The remarks came hours after the Rosario Stock Exchange released a
report that trimmed soybean crop projections to 21.5 million tonnes
from the previous 23 million tonnes, the report notes.
Quizzed by a moderator about what exactly the talks were
addressing, Massa's response was plain and simple, the report
relays.
"Everything is on the table in the discussions with the Fund," he
declared, the report adds.
About Argentina
Argentina is a country located mostly in the southern half of South
America. Its capital is Buenos Aires. Alberto Angel Fernandez is
the current president of Argentina after winning the October 2019
general election. He succeeded Mauricio Macri in the position.
Argentina has the third largest economy in Latin America. The
country's economy is an upper middle-income economy for fiscal year
2019, according to the World Bank. Historically, however, its
economic performance has been very uneven, with high economic
growth alternating with severe recessions, income maldistribution
and in the recent decades, increasing poverty.
Last March 25, 2022, Argentina finalized agreement with the IMF for
a new USD44 billion Extended Funding Facility (EFF) intended to
fund USD40 billion in looming repayments of the defunct Stand-By
Arrangement (SBA), with an extra USD4 billion in up-front net
financing. This has averted the risk of a default to the IMF
and is facilitating a parallel rescheduling of Paris Club debt.
S&P Global Ratings, on March 29, 2023, lowered its long-term
foreign currency sovereign credit rating on Argentina to 'CCC-'
from 'CCC+'. S&P also affirmed its 'C' short-term foreign currency
sovereign credit rating and its 'CCC-/C' local currency ratings on
Argentina. The outlook on the long-term ratings is negative. S&P
also lowered the transfer and convertibility assessment to 'CCC-'
from 'CCC+'. The negative outlook on the long-term ratings
reflects risks
surrounding pronounced economic imbalances and policy uncertainties
before and after the 2023 national elections. Divisions across the
political spectrum constrain the sovereign's ability to implement
timely changes in economic policy. Global capital markets are
closed to Argentina. In the local market, swaps are being deployed
to manage large maturities before placing debt through traditional
auctions. The central bank continues to play a key role as a
backstop for local debt management in the secondary market. The
ongoing severe drought has exacerbated pressures in the already
disrupted foreign exchange (FX) market.
Fitch Ratings, on the other hand, downgraded Argentina's Long-Term
Foreign Currency Issuer Default Rating (IDR) to 'C' from 'CCC-',
and has affirmed the Long-Term Local Currency IDR at 'CCC-' on
March 24, 2023. Fitch's downgrade of Argentina's rating to 'C' from
'CCC-' follows an executive decree that forces domestic
public-sector entities into operations involving their holdings of
sovereign debt securities, which would involve unilateral exchanges
and forced currency conversion that constitute default events under
Fitch's criteria. The 'C' rating reflects Fitch's view that default
is thus imminent. Fitch said the rating would be downgraded to
'Restricted Default' (RD) upon execution of the exchanges.
Moody's Investors Service, in September 2022, affirmed Argentina's
Ca foreign-currency and local-currency long-term issuer and senior
unsecured ratings. The outlook remains stable. The decision to
affirm the Ca ratings balances Argentina's limited market access,
weak governance, and history of recurrent debt restructurings with
recent efforts to marshal fiscal and monetary measures to start
addressing underlying macroeconomic imbalances in the context of
the IMF program that was approved in 2022, according to Moody's.
DBRS, Inc. confirmed Argentina's Long-Term Foreign Currency Issuer
Rating at CCC and downgraded its Long-Term Local Currency Issuer
Rating to CCC from CCC (high) on March 3, 2023.
ARGENTINA: Seeks U.S., Brazil Support for Faster IMF Payouts
------------------------------------------------------------
globalinsolvency.com, citing Reuters, reports that Argentina is
seeking new easing of targets in its $44 billion deal with the
International Monetary Fund and faster payouts, and is pushing to
get key IMF members the United States and Brazil to support it.
The country is expected to return to talks with the IMF over
amending the deal, which has come under strain amid a historic
drought that has battered the country's key cash crops soy and
corn, a senior economy ministry official said, according to
globalinsolvency.com.
Three government sources, including the economy ministry official,
confirmed that the country was seeking to accelerate disbursements,
with some $10.64 billion of funds scheduled to be given currently
between June and December this year, the report notes.
The talks, after the IMF eased program targets already in early
April, come as Argentina's foreign currency reserves hit a
seven-year low with the drought dragging down grains exports, the
main source of dollars, the report says.
That is threatening the country's ability to meet future debt
obligations and make payments on trade, the report notes.
It has ramped up pressure on Argentina and the IMF to revamp the
debt program, the largest extended to any country worldwide, the
report adds.
About Argentina
Argentina is a country located mostly in the southern half of South
America. Its capital is Buenos Aires. Alberto Angel Fernandez is
the current president of Argentina after winning the October 2019
general election. He succeeded Mauricio Macri in the position.
Argentina has the third largest economy in Latin America. The
country's economy is an upper middle-income economy for fiscal year
2019, according to the World Bank. Historically, however, its
economic performance has been very uneven, with high economic
growth alternating with severe recessions, income maldistribution
and in the recent decades, increasing poverty.
Last March 25, 2022, Argentina finalized agreement with the IMF for
a new USD44 billion Extended Funding Facility (EFF) intended to
fund USD40 billion in looming repayments of the defunct Stand-By
Arrangement (SBA), with an extra USD4 billion in up-front net
financing. This has averted the risk of a default to the IMF
and is facilitating a parallel rescheduling of Paris Club debt.
S&P Global Ratings, on March 29, 2023, lowered its long-term
foreign currency sovereign credit rating on Argentina to 'CCC-'
from 'CCC+'. S&P also affirmed its 'C' short-term foreign currency
sovereign credit rating and its 'CCC-/C' local currency ratings on
Argentina. The outlook on the long-term ratings is negative. S&P
also lowered the transfer and convertibility assessment to 'CCC-'
from 'CCC+'. The negative outlook on the long-term ratings reflects
risks
surrounding pronounced economic imbalances and policy uncertainties
before and after the 2023 national elections. Divisions across the
political spectrum constrain the sovereign's ability to implement
timely changes in economic policy. Global capital markets are
closed to Argentina. In the local market, swaps are being deployed
to manage large maturities before placing debt through traditional
auctions. The central bank continues to play a key role as a
backstop for local debt management in the secondary market. The
ongoing severe drought has exacerbated pressures in the already
disrupted foreign exchange (FX) market.
Fitch Ratings, on the other hand, downgraded Argentina's Long-Term
Foreign Currency Issuer Default Rating (IDR) to 'C' from 'CCC-',
and has affirmed the Long-Term Local Currency IDR at 'CCC-' on
March 24, 2023. Fitch's downgrade of Argentina's rating to 'C' from
'CCC-' follows an executive decree that forces domestic
public-sector entities into operations involving their holdings of
sovereign debt securities, which would involve unilateral exchanges
and forced currency conversion that constitute default events under
Fitch's criteria. The 'C' rating reflects Fitch's view that default
is thus imminent. Fitch said the rating would be downgraded to
'Restricted Default' (RD) upon execution of the exchanges.
Moody's Investors Service, in September 2022, affirmed Argentina's
Ca foreign-currency and local-currency long-term issuer and senior
unsecured ratings. The outlook remains stable. The decision to
affirm the Ca ratings balances Argentina's limited market access,
weak governance, and history of recurrent debt restructurings with
recent efforts to marshal fiscal and monetary measures to start
addressing underlying macroeconomic imbalances in the context of
the IMF program that was approved in 2022, according to Moody's.
DBRS, Inc. confirmed Argentina's Long-Term Foreign Currency Issuer
Rating at CCC and downgraded its Long-Term Local Currency Issuer
Rating to CCC from CCC (high) on March 3, 2023.
===========
B R A Z I L
===========
BRAZIL: Central Bank Keeps Interest Rate at 13.75%
--------------------------------------------------
globalinsolvency.com, citing Bloomberg News, reports that Brazil's
central bank held its interest rate steady for the sixth straight
meeting, sticking with its tough inflation warnings and tweaking
its language only slightly even as President Luiz Inacio Lula da
Silva calls for looser monetary policy.
In a statement, Copom, as the board is known, made a small
concession by saying a new rate hike is less likely, softening
language used since September, according to globalinsolvency.com.
At the same time, policymakers warned that the eventual approval of
a new public spending framework wouldn't automatically clear the
way for slower inflation, and that consumer price estimates remain
above their goals, the report notes.
About Brazil
Brazil is the fifth largest country in the world and third largest
in the Americas. Luiz Inacio Lula da Silva won the 2022
Brazilian general election. He was sworn in on January 1, 2023, as
the 39th president of Brazil, succeeding Jair Bolsonaro.
As recently reported in the Troubled Company Reporter-Latin
America, Fitch Ratings, in December 2022, affirmed Brazil's
Long-Term Foreign Currency Issuer Default Rating (IDR) at 'BB-'
with a Stable Outlook. The ratings are constrained by high
government indebtedness, a rigid fiscal structure, weak economic
growth potential, and a record of governability challenges that
have hampered efforts to address these fiscal and economic issues
and clouded policy predictability. The Stable Outlook reflects
Fitch's expectation that growth will slow in the coming year and
that recent fiscal improvement will erode under a new government,
but within a margin consistent with the current rating, and from a
better starting point than previously expected. Uncertainty is
elevated regarding the plans of the incoming government and the
extent to which these could ease or aggravate fiscal and economic
challenges. However, Fitch does not expect policies that
jeopardize broad economic stability.
Standard & Poor's affirmed its 'BB-/B' long- and short-term
foreign and local currency sovereign credit ratings on Brazil, and
the outlook remains stable (June 2022). The stable outlook
reflects S&P's base-case assumption that Brazil will maintain its
fiscal anchors over the next two years despite an increasing
interest burden, preventing significant fiscal slippage and
limiting the rise in its already high debt burden.
Moody's credit rating for Brazil was last set at Ba2 in 2018 with
stable outlook. Moody's affirmed the Ba2 issuer ratings and
senior unsecured bond ratings in April 2022.
DBRS's credit rating for Brazil is BB (low) with stable outlook
(March 2018).
BRAZIL: Industrial Production Grows 1.1% in March, Says IBGE
------------------------------------------------------------
Rio Times Online reports that industrial production grew in Brazil
by 1.1% in March in relation to February in the seasonally adjusted
series after two consecutive months in decline. Compared to the
same period last year, the industry advanced 0.9%.
From January to March, however, industrial production fell 0.4%.
The accumulated figure for the last 12 months was stable (0%),
according to Rio Times Online.
The result was released by IBGE (Brazilian Institute of Geography
and Statistics), the report notes.
About Brazil
Brazil is the fifth largest country in the world and third largest
in the Americas. Luiz Inacio Lula da Silva won the 2022
Brazilian general election. He was sworn in on January 1, 2023, as
the 39th president of Brazil, succeeding Jair Bolsonaro.
As recently reported in the Troubled Company Reporter-Latin
America, Fitch Ratings, in December 2022, affirmed Brazil's
Long-Term Foreign Currency Issuer Default Rating (IDR) at 'BB-'
with a Stable Outlook. The ratings are constrained by high
government indebtedness, a rigid fiscal structure, weak economic
growth potential, and a record of governability challenges that
have hampered efforts to address these fiscal and economic issues
and clouded policy predictability. The Stable Outlook reflects
Fitch's expectation that growth will slow in the coming year and
that recent fiscal improvement will erode under a new government,
but within a margin consistent with the current rating, and from a
better starting point than previously expected. Uncertainty is
elevated regarding the plans of the incoming government and the
extent to which these could ease or aggravate fiscal and economic
challenges. However, Fitch does not expect policies that
jeopardize broad economic stability.
Standard & Poor's affirmed its 'BB-/B' long- and short-term
foreign and local currency sovereign credit ratings on Brazil, and
the outlook remains stable (June 2022). The stable outlook
reflects S&P's base-case assumption that Brazil will maintain its
fiscal anchors over the next two years despite an increasing
interest burden, preventing significant fiscal slippage and
limiting the rise in its already high debt burden.
Moody's credit rating for Brazil was last set at Ba2 in 2018 with
stable outlook. Moody's affirmed the Ba2 issuer ratings and
senior unsecured bond ratings in April 2022.
DBRS's credit rating for Brazil is BB (low) with stable outlook
(March 2018).
===================================
D O M I N I C A N R E P U B L I C
===================================
DOMINICAN REPUBLIC: To Issue Measures in May in Favor of Tourism
----------------------------------------------------------------
Dominican Today reports that the Dominican Government will issue
next May a resolution to promote sustainable tourism that
contemplates the reduction of the use of plastics in hotels,
announced the Minister of Tourism, David Collado.
On the first day of the Dominican Annual Tourism Exchange (DATE),
the leading tourism fair of the Dominican Republic and also of the
insular Caribbean being held in Punta Cana, Collado reiterated the
Dominican Republic's commitment to environmental protection, "We
are determined to be an example of sustainable and environmentally
friendly tourism," according to Dominican Today.
"We want to make the Dominican Republic not only a leader in the
region (in the tourism sector), but also a more environmentally
friendly destination, with sustainable tourism," said the minister,
given the clear signs that the planet is giving, the report notes.
He also referred to the importance being given to sargassum and, in
this sense, highlighted that the country was the first to hold a
conference of national and international experts, authorities, the
private sector, and academia to analyze the problem of these algae
in the Caribbean and possible solutions, the report relays.
Specifically, during his speech at the seminar, Dominican President
Luis Abinader announced the donation of one million dollars for
research on the integrated management of sargassum, a problem to
which the Ministry of Tourism has been seeking a solution for more
than a year, the report notes.
For his part, Andres Marranzini, executive vice-president of
Asonahores (Association of Hotels and Tourism of the Dominican
Republic), organizer of the fair, referred to the reuse and
optimization of energy in the lodgings already underway and the
recovery of the frequency of washing sheets and towels after an
increase due to the sanitary situation during the covid-19
pandemic, the report discloses.
All the measures are part of the constant development of tourism in
the Dominican Republic, a sector that contributes 25% of the Gross
Domestic Product (GDP) and that breaks records month after month in
terms of tourist arrivals, the report says.
After 2022, closed with the arrival of 8.5 million visitors (7.1
million by air and nearly 1.4 million on board cruise ships), the
Dominican Republic reached 2.8 million tourists in the first
quarter of this year and expects to end 2023 with 10 million, the
report recalls.
With this goal in mind, work continues to be carried out on beach
refurbishment, infrastructure improvement, and the safety of
visitors to the Dominican Republic, the report adds.
About Dominican Republic
The Dominican Republic is a Caribbean nation that shares the island
of Hispaniola with Haiti to the west. Capital city Santo Domingo
has Spanish landmarks like the Gothic Catedral Primada de America
dating back 5 centuries in its Zona Colonial district. Luis Rodolfo
Abinader Corona is the current president of the nation.
TCRLA reported in April 2019 that the Dominican To related that
Juan Del Rosario of the UASD Economic Faculty cited a current
economic slowdown for the Dominican Republic and cautioned that if
the trend continues, growth would reach only 4% by 2023. Mr. Del
Rosario said that if that happens, "we'll face difficulties in
meeting international commitments."
An ongoing concern in the Dominican Republic is the inability of
participants in the electricity sector to establish financial
viability for the system.
Fitch Ratings, in December 2021, revised the Outlook on Dominican
Republic's Long-Term Foreign-Currency Issuer Default Rating (IDR)
to Stable from Negative and affirmed the IDRs at 'BB-'.The
revision of the Outlook to Stable reflects the narrowing of
Dominican Republic's government deficit and financing needs since
Fitch's last review resulting in the stabilization of the
government debt/GDP ratio, as well as the investment-driven
economic momentum, reflected in the faster-than-expected economic
recovery in 2021 that Fitch expects to carry into above-potential
GDP growth during 2022 and 2023.
Standard & Poor's, also in December 2021, revised its outlook on
the Dominican Republic to stable from negative.S&P also
affirmed its 'BB-' long-term foreign and local currency sovereign
credit ratings and its 'B' short-term sovereign credit ratings. The
stable outlook reflects S&P's expectation of continued favorable
GDP growth and policy continuity over the next 12 to 18 months that
will likely stabilize the government's debt burden, despite lack of
progress with broader tax reforms, S&P said.A rapid economic
recovery from the downturn because of the pandemic should mitigate
external and fiscal risks.
Moody's affirmed the Dominican Republic's long-term issuer and
senior unsecured ratings at Ba3 and maintained the stable outlook
in March 2021.
=============
E C U A D O R
=============
ECUADOR: IDB OKs $40MM Loan to Revitalize Productivity in Coasts
----------------------------------------------------------------
The Inter-American Development Bank (IDB) approved a $40 million
loan to Ecuador to boost business labor productivity in the
country's coastal region by investing in science, technology, and
innovation.
The IDB estimates that from 2012 to 2019, labor productivity in the
coastal region fell by an average of 0.4% per year, a trend
accentuated by the COVID-19 pandemic. To address this issue,
Ecuador must foster scientific research capabilities, linkages
between academia and the regional productive sector, and a more
vibrant entrepreneurial environment, among other aspects.
The loan aims to reinvigorate the coastal region's innovation
ecosystem by supporting agro-industrial and aquaculture companies,
startups, and researchers, among others, and helping build
synergies between scientific and entrepreneurial activity. Part of
the operation therefore involves overhauling the infrastructure and
equipment of the Escuela Superior Politécnica del Litoral, an
educational institution at the forefront of research, business,
entrepreneurship, and innovation in Ecuador.
This investment will drive scientific production, dialogue between
academia and business, technology transfer and extension, and the
creation and growth of tech companies in Guayaquil. The operation
has gender focus and contributes to climate change adaptation and
mitigation and environmental sustainability.
The loan has a 25-year repayment term, a five-and-a-half-year grace
period, and an interest rate based on the Secured Overnight
Financing Rate (SOFR).
=====================
P U E R T O R I C O
=====================
ANOINTED SECURITY: Unsecureds Will Get 1% of Claims in 5 Years
--------------------------------------------------------------
Anointed Security Services, Inc., filed with the U.S. Bankruptcy
Court for the District of Puerto Rico a Plan of Reorganization for
Small Business dated May 11, 2023.
The Debtor is a corporation. Since 2011, the Debtor has been in the
business of providing security services to its clients.
The Plan Proponent's financial projections show that the Debtor
will have projected disposable income of $1,050. The final Plan
payment is expected to be paid on 5 years after confirmation of the
Plan.
This Plan of Reorganization proposes to pay creditors of the Debtor
from cash flow from operations, and future income.
Class 1 consists of Priority claims. Each holder of a Priority
Claim will be paid in full, in cash, monthly deposits for 5 years
from the effective date of this Plan, or the date on which such
claim is allowed by a final non-appealable except that Hacienda
will be paid from the amount deposited once it filed with this
Court a complete audit of Debtors credits and debts with Hacienda.
Class 3 consists of non-priority unsecured creditors. This Class
will be paid 1% of total debt in five years.
Debtor has included its president and secretary in its payroll as
they were not receiving any payment in order to insure the 100%
payment of all priority creditors and to fortify the corporate
ability to maintain and increase its clients.
A full-text copy of the Plan of Reorganization dated May 11, 2023
is available at https://bit.ly/3WabT8m from PacerMonitor.com at no
charge.
Attorney for the Plan Proponent:
Hector Figueroa Vincenty, Esq.
El Bufete Del Pueblo, PSC
Luisa Street 61Apartment 1-A Condado
San Juan, PR 00907
Phone: (787) 378-1154
Email: quiebras@elbufetedelpueblo.com
About Anointed Security Services
Anointed Security Services, Inc. has been in the business of
providing security services to its clients since 2011. The Debtor
sought protection for relief under Chapter 11 of the Bankruptcy
Code (Bankr. D.P.R. Case No. 23 00365) on Feb. 10, 2023, with
$100,001 to $500,000 in both assets and liabilities. Judge Mildred
Caban Flores oversees the case.
Hector J. Figueroa Vincenty, Esq., at El Bufete Del Pueblo, PSC
represents the Debtor as counsel.
PUERTO RICO: Court Says Immunity Covers Oversight Board
-------------------------------------------------------
Rick Archer and Vince Sullivan of Law360 report that the U.S.
Supreme Court found territorial governments do have sovereign
immunity and that Puerto Rico's financial oversight board will not
have to face a suit seeking access to its records.
The Oversight Board said in a statement that it welcomes the U.S.
Supreme Court's decision May 11, 2023, to affirm the Oversight
Board's sovereign immunity as an entity within the Government of
Puerto Rico.
Centro de Periodismo Investigativo Inc. (CPI) had sued the
Oversight Board to obtain a vast number of documents. The
Oversight Board moved to dismiss CPI's complaints on
sovereign-immunity and other grounds. A divided First Circuit
panel affirmed the decision by the U.S. District Court for the
District of Puerto Rico denying the Oversight Board's motion to
dismiss the complaint.
The Oversight Board argued at the Supreme Court it is a bedrock
principle of federalism that a federal statute does not abrogate
sovereign immunity unless Congress's intent to abrogate is
"unmistakably clear" in the statutory text.
On May 11, 2023, the U.S. Supreme Court ruled: "The statute does
not explicitly strip the Board of immunity. It does not expressly
authorize the bringing of claims against the Board."
About Puerto Rico
Puerto Rico is a self-governing commonwealth in association with
the United States. The chief of state is the President of the
United States of America. The head of government is an elected
Governor. There are two legislative chambers: the House of
Representatives, 51 seats, and the Senate, 27 seats. The
governor-elect is Ricardo Antonio "Ricky" Rossello Nevares, the
son
of former governor Pedro Rossello.
In 2016, the U.S. Congress passed PROMESA, which, among other
things, created the Financial Oversight and Management Board and
imposed an automatic stay on creditor lawsuits against the
government, which expired May 1, 2017.
The members of the oversight board are: (i) Andrew G. Biggs, (ii)
Jose B. Carrion III, (iii) Carlos M. Garcia, (iv) Arthur J.
Gonzalez, (v) Jose R. Gonzalez, (vi) Ana. J. Matosantos, and (vii)
David A. Skeel Jr.
On May 3, 2017, the Commonwealth of Puerto Rico filed a petition
for relief under Title III of the Puerto Rico Oversight,
Management, and Economic Stability Act ("PROMESA"). The case is
pending in the United States District Court for the District of
Puerto Rico under case number 17-cv-01578. A copy of Puerto Rico's
PROMESA petition is available at
http://bankrupt.com/misc/17-01578-00001.pdf
On May 5, 2017, the Puerto Rico Sales Tax Financing Corporation
(COFINA) commenced a case under Title III of PROMESA (D.P.R. Case
No. 17-01599). Joint administration has been sought for the Title
III cases.
On May 21, 2017, two more agencies -- Employees Retirement System
of the Government of the Commonwealth of Puerto Rico and Puerto
Rico Highways and Transportation Authority (Case Nos. 17-01685 and
17-01686) -- commenced Title III cases.
U.S. Chief Justice John Roberts named U.S. District Judge Laura
Taylor Swain to preside over the Title III cases.
The Oversight Board has hired as advisors, Proskauer Rose LLP and
O'Neill & Borges LLC as legal counsel, McKinsey & Co. as strategic
consultant, Citigroup Global Markets as municipal investment
banker, and Ernst & Young, as financial advisor.
Martin J. Bienenstock, Esq., Scott K. Rutsky, Esq., and Philip M.
Abelson, Esq., of Proskauer Rose LLP; and Hermann D. Bauer, Esq.,
at O'Neill & Borges LLC are onboard as attorneys.
Prime Clerk LLC is the claims and noticing agent. Prime Clerk
maintains the case web site
https://cases.primeclerk.com/puertorico
Jones Day is serving as counsel to certain ERS bondholders.
Paul Weiss is counsel to the Ad Hoc Group of Puerto Rico General
Obligation Bondholders.
*********
S U B S C R I P T I O N I N F O R M A T I O N
Troubled Company Reporter-Latin America is a daily newsletter
co-published by Bankruptcy Creditors' Service, Inc., Fairless
Hills, Pennsylvania, USA, and Beard Group, Inc., Washington, D.C.,
USA, Marites O. Claro, Joy A. Agravante, Rousel Elaine T.
Fernandez, Julie Anne L. Toledo, Ivy B. Magdadaro, and Peter A.
Chapman, Editors.
Copyright 2023. All rights reserved. ISSN 1529-2746.
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