More than 9,000 proofs of claim still to be reconciled before implementation of government DAP
By The Star Staff
Although the Title III bankruptcy court has already confirmed a debt adjustment plan for the central government, there are still more than 9,000 proofs of claim that have yet to be reconciled before the March 15 implementation of the plan.
In a March 2 letter sent by Financial Oversight and Management Board General Counsel Jaime A. El Koury to Gov. Pedro Pierluisi Urrutia, the oversight board asked the government to suggest, by March 9, alternative ways to move forward on the reconciliation process for proofs of claim filed against individual Title III debtors.
The oversight board said that along with the Fiscal Agency and Financial Advisory Authority (AAFAF by its Spanish initials), it has been working to reconcile the proofs of claim filed against each of the Title III debtors but that “nevertheless, we continue to experience significant delays in obtaining thorough, detailed responses from agencies, delays which have impeded our ability to make progress and, ultimately, prompt distributions to creditors, mostly on-island.”
At this time, there remain some 9,300 unreconciled general unsecured claims filed against the commonwealth, the Employees Retirement System (ERS), Public Buildings Authority (PBA), and Highways and Transportation Authority (HTA), the oversight board wrote.
“The court recently confirmed the plan of adjustment for the commonwealth, ERS, and PBA. The [oversight board] anticipates that plan will go effective on or before March 15,” the letter notes. “It is, therefore, imperative that the reconciliation process proceed at a faster pace, so that general unsecured creditors may receive distributions in the most timely fashion. Accordingly, due to the inability to access information, the oversight board wishes to inform you of two steps we intend to take in order to ensure the timely and efficient resolution of remaining claims.”
First, the oversight board said, it intends to set claims reconciliation thresholds for addressing the remaining claims filed against the commonwealth, ERS and PBA. In the event that the board determines that the claim is not likely to be fraudulent or overtly baseless, it will allow the claim as filed. The oversight board will adopt this approach in order to limit the cost and expense of professional time expended on claims of relatively low value, and to ensure the speedy and efficient administration of the claims process.
Second, the oversight board intends to engage with creditors and, where appropriate, allow claims regardless of whether it has received complete information from AAFAF or the commonwealth’s agencies and instrumentalities to enable it to fully reconcile the claim. Even when information is provided, that information is often incomplete and requires significant additional follow-up, the board said in the letter.
“We cannot allow these delays to continue to impede the claims reconciliation process,,” the letter said. “If you believe that an alternative approach is warranted or appropriate, please advise no later than one week from the date of this letter, or 9 March.”