Bloomberg Law’s® Bankruptcy Law News publishes case summaries of the most recent important bankruptcy law decisions, tracks major commercial bankruptcies, and reports on developments in bankruptcy...
By Daniel Gill
The official committee of unsecured creditors in Puerto Rico’s ‘bankruptcy’ asked permission to investigate possible “bad actors” who may have caused or contributed to its financial ruin.
On May 15, the committee filed a “renewed” motion to conduct discovery under Bankruptcy Rule 2004. That rule applies in Puerto Rico’s insolvency proceedings commenced under a special law which incorporates much of the bankruptcy code and rules.
The committee charges in its motion that the Oversight Board overseeing the bankruptcy and an investigator it hired last year haven’t adequately investigated such claims as possible assets to be administered.
On May 3, 2017, Puerto Rico initiated the largest municipal restructuring in U.S. history. The committee in July filed a similar discovery motion, outlining a program “targeting the most significant ‘potential bad actors’” identified as profiting from the financial transactions leading to the financial crisis.
The Oversight Board objected to the first motion, asserting that a special investigator it hired should conduct the same analysis. The court denied the motion without prejudice, meaning it could refile it in the future.
Now the committee complains the Oversight Board failed to keep its promise and complete the investigation by April 2018.
The committee argues that enough time has passed, and that it should be allowed to explore claims for the benefit of creditors.
It wants to start discovery on August 15, or earlier if the investigator completes a report before then.
The court handling the case has already referred the motion to a U.S. magistrate judge for consideration.
Paul Hastings LLP represents the committee. The Commonwealth of Puerto Rico is represented by Proskauer Rose LLP.
The case is In re The Commonwealth of Puerto Rico , Bankr. D.P.R., 17-03283, Motion 5/15/18 .
To contact the reporter on this story: Daniel Gill in Washington at firstname.lastname@example.org
To contact the editor responsible for this story: Jay Horowitz at email@example.com
Copyright © 2018 The Bureau of National Affairs, Inc. All Rights Reserved.
All Bloomberg BNA treatises are available on standing order, which ensures you will always receive the most current edition of the book or supplement of the title you have ordered from Bloomberg BNA’s book division. As soon as a new supplement or edition is published (usually annually) for a title you’ve previously purchased and requested to be placed on standing order, we’ll ship it to you to review for 30 days without any obligation. During this period, you can either (a) honor the invoice and receive a 5% discount (in addition to any other discounts you may qualify for) off the then-current price of the update, plus shipping and handling or (b) return the book(s), in which case, your invoice will be cancelled upon receipt of the book(s). Call us for a prepaid UPS label for your return. It’s as simple and easy as that. Most importantly, standing orders mean you will never have to worry about the timeliness of the information you’re relying on. And, you may discontinue standing orders at any time by contacting us at 1.800.960.1220 or by sending an email to firstname.lastname@example.org.
Put me on standing order at a 5% discount off list price of all future updates, in addition to any other discounts I may quality for. (Returnable within 30 days.)
Notify me when updates are available (No standing order will be created).
This Bloomberg BNA report is available on standing order, which ensures you will all receive the latest edition. This report is updated annually and we will send you the latest edition once it has been published. By signing up for standing order you will never have to worry about the timeliness of the information you need. And, you may discontinue standing orders at any time by contacting us at 1.800.372.1033, option 5, or by sending us an email to email@example.com.
Put me on standing order
Notify me when new releases are available (no standing order will be created)