Monday Update – March 19, 2018

Monday Update – March 19, 2018

Welcome to your weekly Title III update for March 19, 2018. The PR Energy Commission’s request for an injunction dominated the filings.

As I reported last week, the UCC filed an intervention and it was granted. The UCC joined the Board’s motion in opposition to the injunction. In addition, AFFAF filed a motion to intervene and also filed an opposition to the PRAC injunction. Also, AFFAF removed a case PREC filed in the Commonwealth Court ordering PREPA to hand in the fiscal plan it gave the FOMB which, by the way, has not been made public.

In addition, National Public Finance Guarantee Corporation, Assured Guaranty Corp., Assured Guaranty Municipal Corp., Syncora Guarantee, Inc., and Identified Members of the Ad Hoc Group of PREPA Bondholders also requested leave to intervene on the side of PREC, which was partially opposed by the Board. Magistrate Judge Swain decided the issue and ordered:

“Movants shall have the right to file briefs stating their positions, restricted to those issues already raised by the parties in connection with the preliminary injunction proceedings. Movants may be heard at the preliminary injunction hearing concerning issues raised by the existing parties, subject to any restrictions by the hearing Court.

Movants are not entitled to present evidence either as attachments to their brief or at the hearing on the preliminary injunction motion.

Counsel for PREC shall use reasonable and good faith efforts to confer with counsel for Movants in advance of the preliminary injunction hearing to discuss any concerns of the Movants.”

I agree with the FOMB, AFFAF and the UCC that this injunction by PREC is nothing more than a power grab to write the PREPA fiscal plan. The injunction hearing will be heard on March 27, 2018 in New York. I will be listening in San Juan to see what happens.

Judge Swain issued the order on the PBA funds that was stipulated by the parties where the rents will be escrowed and paid as an administrative expense if valid. More litigation in the horizon.

The FOMB filed a request to amend the Case Management Order but nothing of great import. Just cosmetic changes.

This week the PR Senate will begin public hearings on the bill for PREPA’s sale. Seems that the bill will be substantially amended. Hopefully, transparency requirements will be injected into the bill, since it badly needs them.

Last Friday, the PR press reported that Commonwealth Court ordered Governor Rosselló to hand to Senator Bhatia a copy of the fiscal plan provided to the FOMB on April 30, 2017. Since no fiscal plan was due that day and, in fact, the fiscal plan had been certified on March 13, 2017, I read the opinion. The lawsuit dealt with budget but it seems Judge Aracelis Roque confused the documents. I agree that the budget that the Governor gave the FOMB should be made public but confusing one with the other does nothing to the prestige of Puerto Rico’s judges. In any event, the decision, when amended, will be appealed and it will be sometime before we will be able to see the budget, if at all.

This summary is merely what I believe are the more salient motions and decisions in the cases. I receive an average of 20 filings each day so it would be impossible to summarize everything. If you have legal interest in these cases, I urge you to hire an attorney to represent you.