Pierluisi Highlights Broad Support for H.R. 870, the Puerto Rico Chapter 9 Uniformity Act of 2015

Washington, DC—As the House Judiciary Committee’s Subcommittee on Regulatory Reform, Commercial and Antitrust Law prepares to hold a hearing today on H.R. 870, the Puerto Rico Chapter 9 Uniformity Act of 2015, Resident Commissioner Pedro Pierluisi highlighted the broad-based support that has emerged for the legislation.  H.R. 870 would empower the government of the U.S. territory of Puerto Rico to authorize one or more of its government-owned corporations to restructure their debts under Chapter 9 of the federal Bankruptcy Code if they become insolvent, as all state governments are already empowered to do under current federal law.

Three of the four witnesses at the hearing will testify in support of H.R. 870, namely John Pottow, Professor of Law at the University of Michigan Law School; Robert Donohue, Managing Director of Municipal Market Analytics; and Melba Acosta, the President of the Puerto Rico Government Development Bank (GDB).

Moreover, the House Judiciary Committee has received numerous statements and letters in support of H.R. 870 from scholars, practicing attorneys, and stakeholders in the investment community.

“Among law professors and lawyers that specialize in bankruptcy law, support for the legislation appears to be unanimous.  The bill has been endorsed by the National Bankruptcy Conference, which is composed of about 60 top scholars and practitioners in the field of bankruptcy law.  In addition, some of the most respected subject-matter experts in the country have written to the Committee individually to express their support for the bill,” said Pierluisi.

“In Puerto Rico, where unity is rare, the bill has virtually unanimous support as well.  The administration of Governor Alejandro García Padilla will testify in favor of the bill, Puerto Rico Senate President Eduardo Bhatia is a strong supporter of the bill, former Governor Luis Fortuño has written a letter in support of the bill, the Puerto Rico House and Senate have adopted a concurrent resolution urging enactment of the bill, and nine former presidents of the GDB from both local political parties have signed a joint letter in support of the bill.  In addition, 13 private-sector trade associations on the island have signed a memorandum of agreement endorsing the bill.  The bill also enjoys support from Banco Popular, Puerto Rico’s largest bank,” added the Resident Commissioner.

Furthermore, the bill is supported by the vast majority of Puerto Rico’s creditors and other stakeholders within the investment community.  For example, a letter in support of the bill has been sent to the Committee on behalf of 32 funds who own billions of dollars in Puerto Rico bonds.  Last week, the head of the municipal bond group at the world’s largest asset manager stated in a television interview that he supported the bill.  A respected investment firm surveyed approximately two dozen financial institutions, investment advisory firms, mutual funds, hedge funds and others market participants, and found that “there is nearly unanimous agreement that application of the Chapter 9 regime to Puerto Rico’s agencies, instrumentalities and political subdivisions is a reasonable approach and would not impair the normal functioning of the marketplace.”  Fitch Ratings issued a special comment, entitled “Chapter Extension Would Be a Positive for Puerto Rico,” stating that H.R. 870 “would be a positive and important development for Puerto Rico and holders of debt of its public utilities and public instrumentalities.”

“So far as I can tell, the opposition to this bill comes from a very small subset of investment firms.  Respectfully, I believe the arguments they have put forward cannot withstand meaningful scrutiny, and I hope that Congress will not allow such objections to frustrate forward movement on this widely-supported bill,” said Pierluisi.

Links to the letters and statements in support of H.R. 870 are available here, and any additional letters and statements that are submitted will be made available.

  1. National Bankruptcy Conference
  2. Washington Post Editorial Board
  3. Bloomberg Editorial Board
  4. John A. E. Pottow, Professor of Law, University of Michigan Law School 
  5. Kenneth N. Klee, Professor Emeritus, UCLA School of Law
  6. Stephen J. Lubben, Professor of Law, Seton Hall University School of Law
  7. Melissa B. Jacoby, Professor of Law, University of North Carolina School of Law
  8. Douglas G. Baird, Professor of Law, University of Chicago School of Law
  9. Hon. Gerardo A. Carlo Altieri, former Chief Judge of the U.S. Bankruptcy Court for the District of Puerto Rico (1994-2009)
  10. James E. Spiotto, Managing Director of Chapman Strategic Advisors LLC
  11. Carlos J. Cuevas, Former Professor of Law, New York Law School
  12. Robert Donahue, Managing Director, Municipal Market Analytics, Inc.
  13. “Ad Hoc Group” of 32 financial institutions collectively managing in excess of $410 billion in assets and holding more than $4.2 billion in Puerto Rico municipal debt
  14. FCO Advisors LP (Investment Firm)
  15. Fitch Ratings
  16. Banco Popular
  17. Hon. Eduardo Bhatia, President of the Puerto Rico Senate
  18. Hon. Jaime Perello-Borras, Speaker of the Puerto Rico House of Representatives
  19. Hon. Luis G. Fortuño, former Governor of Puerto Rico and former Member of Congress
  20. Melba Acosta, President, Puerto Rico Government Development Bank  
  21. Nine Former Presidents of the Puerto Rico Government Development Bank
  22. Puerto Rico Legislative Assembly (Senate Concurrent Resolution 41)
  23. Saft America (U.S. High-Technology Battery Manufacturer)
  24. National Grocers Association
  25. National Puerto Rican Coalition
  26. Puerto Rico Chamber of Commerce
  27. Puerto Rico Manufacturers Association
  28. Puerto Rico Pharmaceutical Industry Association
  29. Puerto Rico United Retailers Association
  30. Puerto Rico Association of Financial Professionals
  31. Puerto Rico Certified Public Accountants Association
  32. Puerto Rico Mortgage Bankers Association
  33. Puerto Rico General Contractors Association
  34. Puerto Rico Home Builders Association
  35. Puerto Rico Chamber of Food Marketing, Industry and Distribution
  36. Puerto Rico Hotels and Tourism Association
  37. Puerto Rico Restaurants Association
  38. Puerto Rico Hospitals Association
  39. Puerto Rico Renewable Energy Producers Association
  40. Center for a New Economy
  41. South Florida Puerto Rican Chamber of Commerce
Bill will be the subject of a hearing today before the House Judiciary Committee

Pierluisi Highlights Broad Support for H.R. 870, the Puerto Rico Chapter 9 Uniformity Act of 2015 | Res. Comm. Pedro Pierluisi

Comments

Post a Comment

Popular posts from this blog

IMF Executive Board Discusses the First Assessment of Eligible Countries under the Multilateral Debt Relief Initiative

On December 21, 2005 the Executive Board of the International Monetary Fund (IMF) established the list of countries that qualify for debt relief from the Fund under the Multilateral Debt Relief Initiative (MDRI). Debt relief delivery, which could start as soon as January 3, 2005, is now conditional on getting the consents of all the contributors to the Subsidy Account of the Poverty Reduction and Growth Facility (PRGF) Trust, whose contributions help finance the Initiative. The MDRI will deliver debt relief from the Fund to qualifying members countries with an annual per capita income at or below US$380, and to countries above the threshold that have reached the completion point under the Heavily Indebted Poor Countries (HIPC) Initiative. The implementation of the MDRI will reduce the external debt burden of a number of the world's poorest countries and will provide additional resources to help them reach the Millennium Development Goals (MDGs). Background The Executive Board appro...
Read more

Oil’s chaotic collapse deepens; stocks drop worldwide

Image
NEW YORK (AP) — Oil prices crumpled even further Tuesday, and U.S. stocks sank to their worst loss in weeks as worries swept markets worldwide about the economic carnage caused by the coronavirus pandemic. The market’s spotlight was again on oil, where prices have plummeted because very few people are flying or driving, and factories have shut amid widespread stay-at-home orders. Global demand is set to drop to levels last seen in the mid 1990s. At the same time, oil producers can’t slow their production fast enough, and all the extra crude means storage tanks are quickly running out of room. The cost for a barrel of U.S. oil to be delivered in June plunged 43% to $11.57. That’s the part of the market that oil traders are focused on and trading most actively. For oil to be delivered next month, which is when storage tanks could top out, the cost of a barrel stood at $10.01. A day earlier, it fell below zero for the first time, meaning traders paid others to take oil off their hand...
Read more

Mapping Extreme Poverty Around the World A new report from the

Image
A new report from the  World Bank  just landed, finding that a record low of 10% of humanity now live in extreme poverty, down from 11% in 2013. But poverty rates aren’t anywhere close to equal between continents or even countries, as our new series of maps clearly demonstrates. The World Bank provides an in-depth explanation for its methodology, which you can find in Appendix A of the full report  here . We focused on the percentage of people in each country living below what the World Bank defines as extreme poverty, or $1.90/day. We’ll let the researchers defend this definition on their own, but there is one caveat to keep in mind. It can be extraordinarily difficult to collect reliable data from so many countries on a regular basis, and in fact we used the latest year in which numbers were available whenever possible. For example, in some of these maps we compare 2011 figures against 2015. In short, our maps provide the clearest possible apples-to-apples compa...
Read more