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Puerto Rico Supervisory Board opposes request for extension of vote

The Puerto Rican Supervisory Board opposed a request by a Puerto Rican bondholder to further extend the voting deadline for the retail bondholder adjustment plan.

In response to requests from the Retirees Committee, Unsecured Creditors Committee and bondholder Peter Hein, Puerto Rico bankruptcy judge Laura Taylor Swain extended the deadline for voting on the October 4 plan to September 27. to October 18. Hein had requested a further extension until October 25. On Monday, a lawyer for current and former government employees seeking salaries also asked for an extension until October 25.

Puerto Rico Supervisory Board attorney Brian Rosen said bondholder Peter Hein had not presented good reasons to extend the voting deadline for bondholders beyond October 18.

Hein stressed that the plan provides that the board will submit a “plan supplement” no later than seven days before the voting deadline. According to Monday’s board objection, this will include local legislation on new general obligations and contingent value instruments, which are part of the plan. The bond buyer asked the council if it expected the local government to approve legislation for the new GOs and CVIs by October 11, but the council did not immediately respond.

The plan supplement is currently supposed to be submitted before 5 p.m. on Monday.

Hein said his broker Merrill Lynch asked his Puerto Rico bondholders to vote by 3 p.m. on October 12. He said he would need more time to review the diet supplement.

In response, on Monday, the board said that “the Bankruptcy Solicitation Procedures Ordinance still provided that the plan supplement would be filed no later than seven days before the voting deadline, and that holders debt obligations could be required to submit instructions to their candidates… ahead of this voting deadline.

The board, in a file signed by Proskauer partner Brian Rosen, told Swain that the voting deadline for retail bondholders should not be extended.

In his September 29 filing, Hein also complained that the solicitation records given to bondholders did not comply with the Solicitation Procedures Ordinance and that further disclosures are required.

The board denied both requests.

“The Solicitation Procedures Ordinance does not require every creditor to receive a paper ballot or a notice of voting and voting instructions in their solicitation file, as Mr. Hein claims,” ​​the board said. administration. Instead, the order requires that the package sometimes include a ballot. Other times, like this one, retail cardholders will electronically deliver their vote to their nominees, which in this case is Merrill Lynch. Merrill will then deliver the votes.

Hein said the solicitation package should include the voting notice and election instructions for the holders. The board said this was incorrect because in this case, as in others, the candidate would have provided them electronically.

The solicitation records complied with the Solicitation Procedures Ordinance, the board of directors told Swain.

Hein said the solicitation records are insufficient because they do not include a statement that retail investors must surrender their bonds by the voting deadline to DTC’s automatic bid program to be eligible for receive retail support fees. The board said this was clearly stated in the disclosure statement and in the proposed adjustment plan, which were distributed to retail holders.

Also on Monday, a Puerto Rican lawyer filed a motion to extend the voting deadline for his clients – current and former government employees seeking a salary – on at least October 25. The group is currently assigned to Class 58, General Unsecured Claims, in the Adjustment Plan. This class is expected to achieve an expected payback of 20.4% plus distributions from an avoidance share trust.

Lawyer Ivonne Gonzalez Morales asked why the claims could not be addressed through the court’s administrative claims reconciliation process rather than through the adjustment plan. She said she represented thousands of claimants, many of whom were part of large claimant groups of over 1,000. She said repeatedly that only one solicitation package was sent to each group.

Salary seekers say they are owed about $ 247 million. The Puerto Rico Oversight Board tells many claimants their claims are only $ 1, which Gonzalez Morales says is incorrect and manipulative.

Dozens of claimants said in early October that they had yet to receive the packages. Others received them days before the original October 4 deadline. Most of them are low-income and therefore do not have a computer and therefore cannot open the USB drives sent with the solicitation packages. This is another reason why the deadline should be extended, Gonzalez Morales said.

On Tuesday, Swain set a briefing schedule regarding the claimants’ salary claim. Anyone wishing to respond must do so before 5 p.m. this Friday. The movants (salary claimants) would then have until noon on October 12 to contest the responses.


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Jacob C.

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