/raid1/www/Hosts/bankrupt/TCRLA_Public/230630.mbx
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, June 30, 2023, Vol. 24, No. 131
Headlines
A N T I G U A A N D B A R B U D A
ANTIGUA & BARBUDA: IMF Says Economy is on a Solid Recovery Path
A R G E N T I N A
ARGENTINA: To Make $1.9 Billion Payment to IMF as Scheduled
B A H A M A S
FTX GROUP: Sues Ex-Clinton Aide's Investment Firm for $700 Million
B R A Z I L
BANCO SOFISA: Moody's Affirms 'Ba2' Deposit Ratings, Outlook Stable
BRAZIL: Foreign Investment Fell by 30% After Record Year in 2022
C H I L E
CHILE: Central Bank Cuts High-End of 2023 Economic Growth Forecast
P U E R T O R I C O
3RD MILLENNIUM: FIles for Chapter 11; Landlord Seeks Dismissal
PUERTO RICO: PREPA Sued by Union to Stop Genera PR Contract
- - - - -
=====================================
A N T I G U A A N D B A R B U D A
=====================================
ANTIGUA & BARBUDA: IMF Says Economy is on a Solid Recovery Path
---------------------------------------------------------------
An International Monetary Fund (IMF) team, led by Ms. Emine Boz,
visited Antigua and Barbuda during June 19 to 23, 2023 and met
government officials and other counterparts to discuss recent
economic developments, economic outlook, and policy priorities. At
the conclusion of the visit, Ms. Boz issued the following
statement:
Economic activity is on a solid recovery path after a sharp decline
during the pandemic. Growth is projected at 7.8 and 5.5 percent for
2022 and 2023, respectively, on the back of robust tourism and
construction activity. The number of stayover tourists bounced
back, reaching 98 percent of pre-pandemic levels during the first
four months of 2023, with arrivals from the U.S. and U.K. taking
the lead. Accordingly, real GDP is expected to recover to its
pre-pandemic level this year. After peaking at 9.2 percent at
end-2022, inflation has since receded to 4.6 percent (year-on-year)
by March 2023, partly driven by a decline in fuel prices.
The government's efforts to boost revenues are helped by strong
growth but the fiscal situation remains challenging with elevated
debt and high financing needs. Preliminary budget outturn suggests
a primary deficit of 1.4 percent of GDP for 2022. The deficit was
smaller than that in 2021, but higher than projected by the
authorities and the IMF staff in the 2022 Article IV Staff Report.
Public debt-to-GDP is estimated to have declined to 87 percent by
end-2022 from 97 percent at end-2021 on the back of strong nominal
GDP growth. Authorities should continue their efforts to streamline
tax exemptions, strengthen tax compliance and administration, and
improve public spending efficiency. There are ongoing initiatives
to enhance coordination across different social transfer programs
and digitize information; these should be accompanied by efforts to
broaden coverage and improve targeting and monitoring of the social
safety net. In addition, the authorities should work with domestic
and external creditors to clear existing arrears and avoid the
accumulation of new arrears. Strong economic recovery combined with
global food and fuel prices down from their highs last year,
provides a window of opportunity to put public finances on a
sustainable footing, while protecting the vulnerable.
The financial sector is stable and liquid, with non-performing
loans declining gradually. Bank credit to the private sector
remains subdued, especially in relation to the growth in economic
activity, reflecting several factors including a wait-and-see
approach taken by potential borrowers and economic uncertainty.
Authorities should monitor the credit growth of credit unions and
further strengthen supervision and regulation of the credit union
sector. The nonperforming loan ratios of commercial banks and
credit unions modestly exceed the prudential level of 5 percent.
Authorities should maintain strong loan loss provisioning, which is
currently above the ECCB's prudential level of 60 percent for both
banks and credit unions.
The country faces increasing challenges from natural disasters and
has a need to upskill workers. Authorities should continue
resilience building efforts, creating sufficient buffers against
natural disasters. Transition to renewable energy is essential for
reducing reliance on fossil fuels and lowering energy costs and
should be accelerated. The labor market recovery from the pandemic
may not raise incomes of all, especially of vulnerable workers, and
the efforts to upskill workers are critical for further reducing
unemployment and facilitating mobility across sectors.
Authorities should continue to make progress in addressing data
gaps, including the calculation of the rental component of the
consumer price index and improvements in the compilation of
national accounts data, which are essential to facilitate
evidence-based policy making.
The mission team thanks the authorities and other counterparts for
their collaboration and support, as well as for valuable
discussions.
=================
A R G E N T I N A
=================
ARGENTINA: To Make $1.9 Billion Payment to IMF as Scheduled
-----------------------------------------------------------
Argentina will make scheduled payments totaling some $1.9 billion
to the International Monetary Fund (IMF), an economy ministry
source said, Reuters reported. The South American country is in
talks with the IMF to revamp its $44 billion loan program with the
lender as it battles with dwindling foreign currency reserves, a
weak peso currency and annual inflation over 100%. Argentina has
$2.7 billion due to the fund this month alone. The government
hopes to bring forward over $10 billion in IMF disbursements this
year, though has been reluctant to agree to tough austerity
measures as the next general elections scheduled for October
approach. Economy Minister Sergio Massa is set to travel to
Washington once an agreement to ease economic targets is drafted
with IMF officials.
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 A H A M A S
=============
FTX GROUP: Sues Ex-Clinton Aide's Investment Firm for $700 Million
------------------------------------------------------------------
Dietrich Knauth at Reuters reports that bankrupt crypto exchange
FTX sued a former aide to Hillary Clinton and the former aide's
investment firm, seeking to claw back $700 million in investments
allegedly made with misappropriated FTX funds.
FTX said its founder Sam Bankman-Fried was a "profligate patron"
who showered Michael Kives, his firm K5 Global, and K5 co-founder
Bryan Baum with cash as part of an ongoing scheme to fraudulently
use company assets for personal gain, according to a complaint
filed in Wilmington, Delaware, bankruptcy court, according to
Reuters.
Bankman-Fried authorized the transfer of $700 million to K5
entities in 2022, and he leaned on K5's celebrity and business
connections in his effort to obtain rescue financing in the days
before FTX went bankrupt in November 2022, according to the
lawsuit, the report notes.
Bankman-Fried described Kives, who served as an aide to Clinton
when she was a Democratic U.S. senator from New York, and who
worked as a Hollywood agent for clients including actor and former
Republican California governor Arnold Schwarzenegger and singer
Katy Perry, as "probably, the most connected person I've ever met,"
and "a one-stop shop" for political relationships and celebrity
partnerships, according to the complaint, Reuters discloses.
Bankman-Fried brushed off FTX employees' concerns that K5 was
"trying to nickel and dime" or "scam" FTX, continuing to make
investments in a quest to burnish his own political and social
influence, according to the complaint, the report notes.
Bankman-Fried authorized investments in K5 projects that enriched
Kives and Baum with no payoff for FTX or its customers, who were
footing the bill, FTX alleged, the report says.
In one poor investment, according to the complaint, a
Bankman-Fried-controlled shell company used $214 million in funds
from FTX to buy a minority stake in Kendall Jenner's 818 Tequila
brand, at a time when the tequila company's assets were valued at
just $2.94 million in its filings with the U.S. Securities and
Exchange Commission, the report relays.
K5 said that the lawsuit was without merit, the report says.
"K5 was under the impression - like many others - that SBF was
completely legitimate, and that they were entering into a fair,
long-term, and mutually beneficial business relationship,"
spokeswoman Elizabeth Ashford said in an email, referring to
Bankman-Fried by his initials, the report discloses.
Kives did not immediately respond to a request for comment. A
spokesman for Bankman-Fried declined to comment.
Bankman-Fried has pleaded not guilty to charges alleging that he
defrauded FTX customers by using their funds to prop up his own
risky investments, the report notes.
Since filing for bankruptcy, FTX's new leadership has recovered
more than $7 billion in assets that can be used to repay customers
whose funds were frozen when the crypto exchange collapsed, the
report says.
FTX has also filed lawsuits over its pre-bankruptcy investment in
the stock platform Embed and its payments to Genesis Global
Capital, the bankrupt lending arm of crypto firm Genesis, the
report relays. FTX announced a settlement with the Metropolitan
Museum of Art, in which the museum agreed to return $550,000 in
donations that it received from FTX companies in 2022, the report
adds.
About FTX Group
FTX is the world's second-largest cryptocurrency firm. FTX is a
cryptocurrency exchange built by traders, for traders. FTX offers
innovative products including industry-first derivatives, options,
volatility products and leveraged tokens.
Then CEO and co-founder Sam Bankman-Fried said Nov. 10, 2022, that
FTX paused customer withdrawals after it was hit with roughly $5
billion worth of withdrawal requests.
Faced with liquidity issues, FTX on Nov. 9 struck a deal to sell
itself to its giant rival Binance, but Binance walked away from the
deal amid reports on FTX regarding mishandled customer funds and
alleged US agency investigations.
At 4:30 a.m. on Nov. 11, Bankman-Fried ultimately agreed to step
aside, and restructuring vet John J. Ray III was quickly named new
CEO.
FTX Trading Ltd (d/b/a FTX.com), West Realm Shires Services Inc.
(d/b/a FTX US), Alameda Research Ltd. and certain affiliated
companies then commenced Chapter 11 proceedings (Bankr. D. Del.
Lead Case No. 22-11068) on an emergency basis on Nov. 11, 2022.
Additional entities sought Chapter 11 protection on Nov. 14, 2022.
FTX Trading and its affiliates each listed $10 billion to $50
million in assets and liabilities, making FTX the biggest
bankruptcy filer in the US this year. According to Reuters, SBF
shared a document with investors on Nov. 10, 2022, showing FTX had
$13.86 billion in liabilities and $14.6 billion in assets. However,
only $900 million of those assets were liquid, leading to the cash
crunch that ended with the company filing for bankruptcy.
The Hon. John T. Dorsey is the case judge.
The Debtors tapped Sullivan & Cromwell, LLP as bankruptcy counsel;
Landis Rath & Cobb, LLP as local counsel; and Alvarez & Marsal
North America, LLC as financial advisor. Kroll is the claims agent,
maintaining the page https://cases.ra.kroll.com/FTX/Home-Index
The Official Committee of Unsecured Creditors tapped Paul Hastings
as counsel, FTI Consulting, Inc., as financial advisor, and
Jefferies LLC as the investment banker. Young Conaway Stargatt &
Taylor LLP is the Committee's Delaware and conflicts counsel.
Montgomery McCracken Walker & Rhoads LLP, led by partners Gregory
T. Donilon, Edward L. Schnitzer, and David M. Banker, is
representing Sam Bankman-Fried in the Chapter 11 cases.
White-collar crime specialist Mark S. Cohen has reportedly been
hired to represent SBF in litigation. Lawyers at Paul Weiss
previously represented SBF but later renounced representing the
entrepreneur due to a conflict of interest.
===========
B R A Z I L
===========
BANCO SOFISA: Moody's Affirms 'Ba2' Deposit Ratings, Outlook Stable
-------------------------------------------------------------------
Moody's Investors Service affirmed all ratings and assessments
assigned to Banco Sofisa S.A. (Sofisa), including the bank's Ba2
long-term local and foreign currency deposit ratings and Ba1
long-term local and foreign currency Counterparty Risk Ratings. The
Baseline Credit Assessment (BCA) and adjusted BCA of ba2, the
long-term and short-term Counterparty Risk Assessments of Ba1(cr)
and Not Prime(cr), respectively, as well as the local and foreign
currency Not Prime short-term deposit and counterparty risk ratings
were also affirmed. The outlook on the long-term local and foreign
currency deposit ratings remains stable.
RATINGS RATIONALE
The rating affirmation and the stable outlook are driven by good
performance of Sofisa over the past three years, supported by its
well-established business in lending to small and mid-sized
companies (SME), and the long track record of superior asset
quality and steady profitability. With disciplined loan
underwriting standards, backed by tight and agile controls over
collaterals and credit limits, Sofisa has been able to curb loan
losses amid the challenging scenario and will continue to manage
risks arising from a sluggish economic activity and elevated
interest rates in the next 12 to 18 months. Despite the bank's
higher reliance on more confidence and price-sensitive deposits
than that of larger ba2 rated banks in Brazil which count on wide
brick-and-mortar branch networks, Moody's assessment also
acknowledges the ample liquidity buffer maintained by the bank
throughout economic cycles, as well as bank's continuous efforts to
improve funding diversification by increasing the share of granular
retail deposits sourced through its proprietary digital platform,
Sofisa Direto.
Its problem loans accounted for only 0.78% of credit portfolio at
the end of 2022, in line with the 0.75% average reported between
2015 and 2021, and well below the system-average delinquency ratio
of 3.2% for the SME segment. In the face of stiff macroeconomic
headwinds, Moody's expect provision expenses to rise in 2023 but
mitigated by the secured nature of Sofisa's loan book. In December
2022, the bank's loan loss reserves stood at 246% of problem loans,
serving as an adequate buffer against challenging credit
conditions.
By keeping credit costs under control and a steady business volume,
Sofisa has been able to maintain stable earnings generation in
spite of rising competition in its core markets. Net income to
tangible banking assets stood around 1.7% on average between 2015
to 2021, falling to 1.3% in 2022 as a result of increased operating
expenses that has been supporting the bank's growth strategy to
broaden SME target markets as well as product offering within its
digital banking platform.
In 2022, Sofisa's loan book grew 19%, which reduced the bank's
tangible common equity to risk weighted assets to 8.4% from 9.3%
one year earlier. The affirmation of Sofisa's ratings also takes
into account the gradual efforts to increase funding
diversification with continuous growth of more granular and stable
customer deposits through its Sofisa Direto's retail platform. As
of December 2022, the bank's top 20 depositors accounted for 17% of
total deposits, compared to 45% in 2019.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The ba2 BCA and Ba2 deposit ratings assigned to Banco Sofisa is
currently at the same level as the Government of Brazil's Ba2
sovereign bond rating, and therefore, there is limited upward
pressure to the bank's ratings at this point.
Conversely, Sofisa's standalone credit profile would be negatively
affected should the bank loosen its traditionally strict credit
policies, materially denting asset quality metrics. A significant
change in the competitive landscape or a consistent increase in the
reliance of more expensive funding sources to support its growth
strategy could adversely affect long-run profitability, and
increase its vulnerability to refinancing risk, drivers that could
also have negative implications to the BCA.
METHODOLOGY USED
The principal methodology used in these ratings was Banks
Methodology published in July 2021.
BRAZIL: Foreign Investment Fell by 30% After Record Year in 2022
----------------------------------------------------------------
Richard Mann at Reuters reports that according to the Central Bank,
foreign investment in Brazil's productive sector dropped by 28.3%
in the first four months of 2023 compared to the same period last
year.
The net direct investment in the country during this period
amounted to US$24.3 billion, contrasting with US$33.9 billion
recorded in the equivalent interval of 2022, according to Reuters.
Economists believe the decline in foreign capital inflows is not
directly related to government and economic policy changes, 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).
=========
C H I L E
=========
CHILE: Central Bank Cuts High-End of 2023 Economic Growth Forecast
------------------------------------------------------------------
globalinsolvency.com, citing Reuters, reports that Chile's central
bank lowered the high-end of its forecast for economic growth in
2023 amid still tight financial conditions, but increased the
outlook for 2024 as it hints at potential interest rate cuts in the
short-term.
The revisions came a day after the monetary authority decided to
keep its benchmark interest rate unchanged at 11.25%, but said it
could begin cutting it soon if recent positive trends continue,
according to globalinsolvency.com.
The world's largest copper producer is now expected to post a gross
domestic product (GDP) growth of as much as 0.25% this year, the
central bank said, down from the 0.5% projected before, the report
notes.
The low-end of the forecast was kept at a 0.5% drop. "Activity
projections show minor changes," the institution said in a report,
adding they were "mainly associated with the performance of the
mining industry" as copper output slipped in recent months, the
report relays.
Economic growth would pickup in 2024 and 2025, according to the
bank, which said GDP is forecast to grow between 1.25% and 2.25%
next year, up from a projected range of 1% to 2% before, and
between 2% and 3% in 2025, the report adds.
=====================
P U E R T O R I C O
=====================
3RD MILLENNIUM: FIles for Chapter 11; Landlord Seeks Dismissal
--------------------------------------------------------------
3rd Millennium Surgery Center LLC filed for chapter 11 protection
in the District of Puerto Rico.
The Puerto Rico Convention Center District Authority immediately
filed a motion for the dismissal of the case.
According to the Authority, the case is nothing short of a
two-party dispute between the Debtor and the Authority. The
Authority was Debtor's landlord pursuant to a Ground Lease and
Development Agreement dated Nov. 4, 2016. Due to Debtor's blatant
and undisputed non-compliance with the explicit terms and
conditions of the Lease, the Authority proceeded to issue a notice
of default on Nov. 7, 2019, granting Debtor the contractually
agreed cure period of 30 days. Due to Debtor's failure to cure,
including, but not limited to, the Debtor's failure to provide the
Authority with a duly authorized Certificate of Need and
Convenience (Certificado de Necesidad y Convenicencia or "CNC")
duly emitted to Debtor by the SecretarÃa Auxiliar para
Reglamentacion y Acreditacion de Facilidades de Salud ("SARAFS")
Division of the Puerto Rico Department of Health, as was required
under the Lease, the Lease was terminated, pursuant to its own
terms and conditions.
Notwithstanding the clear and undisputed termination of the Lease,
the Debtor refused to withdraw the inscription of the Lease from
the Puerto Rico Property Register. As such, the Authority was
forced to file a Complaint for Declaratory Judgment in the Superior
Court of San Juan, in order to correct the Property Register.
After a series of filings with the sole purpose of delaying the
inevitable, the Superior Court of San Juan imposed a deadline for
the Debtor to answer both the Complaint and the motion for summary
judgment filed by the Authority. Said deadline was set for June 9,
2023.
Just three days before the deadline, and in another frivolous
attempt to delay its fate, Debtor proceeded to file the bankruptcy
case on June 6, 2023.
"This two-party dispute remains a strenuous and skirmishing fight
that does not belong in this Bankruptcy Court. The captioned case
was filed in bad faith to evade or delay a ruling from the San Juan
Superior Court and interrupt ongoing state court proceedings. As
such, this bad faith filing constitutes cause for dismissal under
Section 1112(b)(1) of the Bankruptcy Code," the Authority said in
court filings.
According to court filings, 3rd Millennium Surgery Center has
$1,600,001 in debt owed to 1 to 49 creditors. The petition states
that funds will be available to unsecured creditors.
About 3rd Millennium Surgery Center
3rd Millennium Surgery Center LLC is a Single Asset Real Estate (as
defined in 11 U.S.C. Section 101(51B)). It owns leasehold interest
in parcels E1 & E2 of the P.R. Convention Center valued at $30
million.
3rd Millennium Surgery Center LLC sought relief under Chapter 11 of
the U.S. Bankruptcy Code (Bankr. D.P.R. Case No. 23-01737) on June
6, 2023. In the petition filed by Hector Lopez Quinones, as
authorized representative of the Debtor, the Debtor reports total
assets of $30,000,000 and total liabilities of $1,600,001.
The Honorable Bankruptcy Judge Edward A Godoy oversees the case.
The Debtor is represented by:
Rafael A. Gonnzalez Valiente, Esq.
GODREAU & GONZALEZ LAW
2 Vela St.
Esquire Bldg. PH-2
San Juan, PR 00918
Tel: (787) 726-0077
Email: rgv@g-glawpr.com
PUERTO RICO: PREPA Sued by Union to Stop Genera PR Contract
-----------------------------------------------------------
Alex Wolf of Bloomberg Law reports that a Puerto Rico Electric
Power Authority worker union sued the electric utility to block a
New Fortress Energy unit's 10-year takeover of power generation
assets.
A deal to put New Fortress subsidiary Genera PR LLC in control of
PREPA's power plants' responsible for nearly 70% of the island's
generation capacity would create a monopoly in violation of local
law, the Union de Trabajadores de La Industria Electrica y Riego,
or UTIER, said in a complaint filed in the US District Court for
the District of Puerto Rico.
PREPA Plan
Meanwhile, the Financial Oversight and Management Board for Puerto
Rico said June 17, 2023, that it has been working to finalize the
revised Fiscal Plan for the Puerto Rico Electric Power Authority
(PREPA). That process was set back by the Oversight Board's receipt
and review of new information from, among others, PREPA, LUMA
Energy LLC, and Genera PR.
Such data and its impact on the projections included in the 2023
PREPA Fiscal Plan will determine amendments that will be required
to the PREPA Plan of Adjustment to maintain its feasibility.
The Oversight Board believes it is in all parties' best interests
that it simultaneously certify the 2023 PREPA Fiscal Plan and
specify any necessary amendments to the Plan of Adjustment.
Therefore, the Oversight Board informed the Court that it could not
responsibly certify the 2023 PREPA Fiscal Plan by its anticipated
deadline of June 16, 2023.
The Oversight Board is committing by no later than June 23, 2023 to
certify the 2023 PREPA Fiscal Plan and to identify any necessary
amendments to the Plan of Adjustment. The amendments may or may
not require resolicitations but given the proximity of the
confirmation hearing's commencement date, it is likely the
Oversight Board (and other parties) may seek to change the
confirmation schedule based on these developments, especially the
June 26, 2023 deadline for witness declarations because any
amendments could impact witness declarations.
The Oversight Board requested that the Court extend the deadline
for the Court's requested status report on the 2023 PREPA Fiscal
Plan from June 21, 2023, to June 28, 2023. The Oversight Board
will meet and confer with counsel for objectors as soon as
practicable after the 2023 PREPA Fiscal Plan is certified.
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.
This material is copyrighted and any commercial use, resale or
publication in any form (including e-mail forwarding, electronic
re-mailing and photocopying) is strictly prohibited without prior
written permission of the publishers.
Information contained herein is obtained from sources believed to
be reliable, but is not guaranteed.
The TCR Latin America subscription rate is US$775 per half-year,
delivered via e-mail. Additional e-mail subscriptions for members
of the same firm for the term of the initial subscription or
balance thereof are US$25 each. For subscription information,
contact Peter A. Chapman at 215-945-7000.
.
* * * End of Transmission * * *