• The Star Staff

Fiscal board seeks another extension for commonwealth debt adjustment plan

By The Star Staff

The Financial Oversight and Management Board for Puerto Rico said Wednesday that the primary focus of the government and the oversight board should be to protect the health and welfare of the people of Puerto Rico from COVID-19 and asked the federal court to give it until September to provide an updated status report on the future of the commonwealth debt adjustment plan.

Puerto Rico’s debt restructuring has been on pause for several months because of the coronavirus pandemic. The oversight board had approved budgets and fiscal plans for various bankrupt entities despite not fully knowing the impact on the economy of COVID-19, the disease caused by the novel coronavirus.

“While the Oversight Board has resumed plan discussions, because of the fluid situation on the Island, the Oversight Board is unprepared at this time to propose a schedule for the Debtors’ plan of adjustment and disclosure statement processes,” the oversight board said.

As of Wednesday, there were 8,714 confirmed and likely cases of COVID-19 and 157 deaths caused by the disease on the island. Furthermore, worsening drought conditions in Puerto Rico forced the governor to declare a state of emergency on June 29.

The island Department of Labor and Human Resources has publicly said there are 600,000 claims for unemployment benefits.

“The Oversight Board continues to work with the Government to develop solutions as these conditions and their effects persist,” the board said.

The board said it is engaging in discussions with creditors that will take into account, among other things, the court’s June 26 decisions in connection with certain motions for relief from the automatic stay filed by holders and insurers of Highway and Transportation Authority bonds, Convention Center District Authority bonds, and Puerto Rico Infrastructure Authority rum tax bonds, as well as the outcome of the ongoing Employee Retirement System (ERS) bonds litigation that will impact the debt adjustment plan.

Due to the restrictions imposed by various executive orders issued by Gov. Wanda Vázquez Garced in response to the coronavirus pandemic and their impact on the people of Puerto Rico, along with the inability to open and operate tax collection centers, the oversight board on June 10 requested extensions for deadlines by which creditors of the bankrupt Public Buildings Authority (PBA) must file proofs of claim. Collection centers reopened on July 1.

“Accordingly, neither the PBA nor the ERS intend to seek a further extension of the deadline to submit proofs of claims or information forms,” the board noted.

The commonwealth has been in bankruptcy under the federal Puerto Rico Oversight, Management and Economic Stability Act to restructure some $70 billion debt not including pension liabilities.

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