Debt adjustment plan confirmation hearings set for Nov. 8

By The Star Staff

The hearings to confirm Puerto Rico’s debt adjustment plan that would restructure some $35 billion in debt are slated to start Nov. 8.

The debt adjustment plan is expected to face opposition during confirmation hearings because the island government and Legislature oppose the proposed 8.5% pension cuts contained in the plan for pensions that are higher than $1,500 per month.

U.S. District Court Judge Laura Taylor Swain denied a request to amend procedures ahead of the approval of the plan’s disclosure statement, which may occur at a hearing set for next Tuesday.

Swain established a schedule that would allow stakeholders to conduct discovery toward the confirmation of the debt adjustment plan.

Tuesday’s hearing to consider approval of the plan’s disclosure statement was scheduled to facilitate negotiations between the debtors and certain bond insurers and the completion of arguments on disclosure statement objections and related matters, Swain said.

While the government submitted a fifth amended plan of adjustment recently, the judge said a further amended plan of adjustment and disclosure statement may be filed prior to the continued hearing date.

“Under these circumstances, the court declines to enter the Amended Procedures Order in advance of its decision on the motion for approval of the disclosure statement,” Swain said in an order Wednesday.

But discovery, she said, should start promptly.

She scheduled Aug. 3 as the deadline for debtors to file a preliminary witness list. Creditors and parties that wish to participate in discovery and/or obtain access to the Plan Document Depository must file a Notice of Intent to Participate in Discovery by Aug. 15.

Creditors and parties who want access to documents in the Plan Depository must file their Notice of Intent to Participate in Discovery by Oct. 19.

“The failure to file a Notice of Intent to Participate in Discovery will not prevent anyone from filing an objection to the confirmation of the plan — it will just exclude them from participating in discovery,” Swain said.

The deadline to file objections to the confirmation of the debt adjustment plan is Oct. 19.

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