Relevant Document:Findings of Fact and Conclusions of LawJudge Laura Taylor Swain has just entered findings of fact and conclusions of law in connection with confirming the
sixth modified eighth amended plan of adjustment for the commonwealth of Puerto Rico, the Employees Retirement System of the Government of the commonwealth of Puerto Rico, and the Puerto Rico Public Buildings Authority Title III debtors.
In the findings of fact, Judge Swain makes the following observation: “[W]ith the incorporation of certain specified revisions, the Plan proposed by the Oversight Board meets the confirmation requirements of PROMESA and does not violate the Constitution. The Court has also determined that PROMESA itself does not violate the Constitution. In moving forward following confirmation, the Court urges the people of Puerto Rico to use their resources and voices well, and urges those who govern and those who oversee Puerto Rico to listen to those voices, to make wise choices and explain them well, and to lead Puerto Rico to a better, brighter, and more vibrant future of growth and economic stability.”
Confirmation of the plan comes after more than four years since the commonwealth entered Title III, filing its petition on May 3, 2017. The court held an eight-day
confirmation trial on the plan of adjustment, which concluded Nov. 23, 2021, and took the confirmation decision under advisement.
Thereafter, the plan was modified a number of times, including after Judge Swain
identified certain aspects of the plan that were “materially problematic.” The oversight board filed the now-confirmed plan last week in line with the Title III court’s
Jan. 10 order directing the oversight board to file a “compliant” plan with certain revisions.
Mediation Team Leader Judge Barbara Houser in a
status report today signaled that her team’s job was done, asking the court to enter an order dissolving the mediation team “[i]n light of the debt restructuring agreements now in place or consummated for all Title III debtors and various of their affiliated instrumentalities.” Judge Houser said that the mediation team “believes it has accomplished the ultimate task assigned to it by the Court.”
In a statement to Reorg, PROMESA oversight board Chairman David Skeel said of the confirmation decision, “It would be hard to overstate the magnitude of this moment. Judge Swain has just confirmed the largest public debt restructuring in American history. Countries and states that fall into financial distress can’t file for bankruptcy, but PROMESA gave Puerto Rico this power. The closest comparison was Detroit, which involved less than one third the amount of debt and a fraction of the unfunded pension liability.”