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Professionals Must Now Disclose Their Interests in the PR Cases

posted by Stephen Lubben

President Biden has just signed the "Puerto Rico Recovery Accuracy in Disclosures Act of 2021’’ or ‘‘PRRADA’," which requires professionals to make chapter 11-style disclosures when they file fee applications in the PROMESA title III cases. Failure to comply not only can result in loss of fees in the Puerto Rico cases, but such failure to disclosure must also be disclosed in other chapter 11 cases going forward. Presumably the prior failure to comply with statutory disclosure requirements should factor into the decision to authorize retention in chapter 11.

Comments

For the people of Puerto Rico, this amendment is just another case of the US closing the stable door after the horse has bolted. "U.S. District Court Judge Laura Taylor Swain approved the Plan of Adjustment for Puerto Rico’s central government bonds and obligations Tuesday afternoon, setting the stage for the commonwealth to exit bankruptcy after more than four years of intense negotiations over its massive debts." https://bit.ly/3GP3BKp

I agree that the law should have been enacted sooner. It spent too much time in the Senate committee. That said, since final fee applications have yet to be filed in the PROMESA case, I think the barn door is being closed while the horse is still in the doorway.

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