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  • The San Juan Daily Star

With coming of new year, professionals in Title III bankruptcy cases are expected to charge more

By The Star Staff

Proskauer Rose LLP, the leading attorneys for the Financial Oversight and Management Board, which is the Title III representative in Puerto Rico’s bankruptcy cases, has informed the court it is increasing the hourly rates of its lawyers effective Jan. 1, 2023.

The rates for some 138 partners and associates will go up to $923 per hour from the current $887 per hour. The impact of the adjustment was not immediately known. The commonwealth has already surpassed the $1 billion mark in professional fees for all the law firms and advisers working in the case, but Proskauer is the main firm.

However, Fee Examiner Brady C. Williamson, of the law firm Godfrey & Kahn, said in a court document that with the Highways and Transportation Authority’s (HTA) debt adjustment plan going into effect on Dec. 6, the professionals working on the HTA case will no longer be filing fees in that particular case. Nonetheless, with inflation, many of the professionals working on the Title III bankruptcy are expected to hike fees.

“As mediation continues, a proposed plan and disclosure statement for PREPA is expected shortly, with a projected June 2023 confirmation hearing date,” the fee examiner said. “In addition, the approaching end of the calendar year brings the fiscal year of many professionals to a close.”

Meanwhile, Puerto Rico Bonistas del Patio financial adviser Ducera Partners and law firm Davis Polk have submitted new documents ahead of the Dec. 14 omnibus hearing in a bid to be paid for their work on behalf of local bondholders.

Those professionals are asking to be paid from Puerto Rico’s Title III estate, as do the financial advisers and lawyers of other professionals. The unsecured creditors committee and others have opposed the payment because Bonistas was not a party to the case like the other stakeholders whose professionals were paid.

Davis Polk submitted a letter from the Puerto Rico Fiscal Agency and Financial Advisory Authority, dated July 2018, that said they would not object to Bonistas professionals being paid.

“Because of the complexity and importance of the mediation and the need for the interests of local bondholders to be adequately represented by parties committed to negotiating with all constituents to achieve a constructive and consensual solution to the Puerto Rico debt crisis, the engagement by [Bonistas] of experienced external lawyers and financial advisors provides significant benefits to local constituents and the commonwealth alike,” the letter said.

Bonistas hasn’t paid the professionals, and they have no recourse against the nonprofit group; they have worked with the expectation that the commonwealth will pay them, Davis Polk attorney Brian Resnick said in a declaration.

Davis Polk and Ducera Partners are seeking $2 million and $5 million, respectively, for their roles advising Bonistas del Patio, a nonprofit established to protect island investors in Puerto Rico’s various bonds.

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