The government of Puerto Rico will have a team of experienced attorneys to handle the suits under Title III of PROMESA, but their contracting will imply the spending of dozens of millions of dollars in cases that could go on for years, yesterday admitted the government’s representative to the Oversight Board (OB), Elías Sánchez Sifonte.
When on May 3, last, governor Ricardo Rosselló Nevares announced that he had requested the OB to petition for protection under Title III in the courts, it was learned that the law firm of Kirkland & Ellis, which represented it for over two years, was among its creditors.
The government owes $5.3 million to Kirkland & Ellis, whose attorneys Michael F. Williams and Peter A. Farrell worked on the case of Puerto Rico since the administration of Alejandro García Padilla.
For the government, the withdrawal of the law firm would mean the loss of legal representation knowledgeable of the Island’s fiscal crisis. But Sánchez Sifonte said that the government is not without competent counsel.
“That was one of the law firms the government of Puerto Rico had retained, but not the only one. There are several law firms working on the case of Puerto Rico,” he noted.
Among the law firms, he mentioned Dentons, O'Melveny & Myers and Greenberg Traurig.
These legal firms, with little experience in the case of Puerto Rico, have their head offices in the United States and collect expensive fees in their international practice. According to the American Bar Association, an attorney who is a partner of an international law firm collects fees of between $700 and $875 per hour. On the other hand, an attorney in Puerto Rico charges for his/her services to the government between $75 and $125 an hour.
“There are several law firms advising and working on the restructuring of Puerto Rico,” Sánchez Sifonte pointed out.
Would that imply a multi-million dollar expenditure in attorneys?
—Without a doubt. Puerto Rico has to have the best talent, the best team of lawyers because it is going to be pitted –in a court process – against the best lawyers in the world whom the creditors will retain. Puerto Rico has to compete on an equal basis.
How much will the investment be?
—I can’t tell you exactly, but it’s going to be in the dozens of millions of dollars.
Where will the money come from?
—That money is budgeted under the Fiscal Agency and Financial Advisory Authority (FAFAA). The FAFAA budget, for the most part, is for this. The purpose of the FAFAA is to be the liaison with the Board and to serve as the Puerto Rican government’s fiscal agent. So it is the FAFAA who has been working out the fiscal plans and who has led the renegotiation of the debt and it is the one who will now go to court during the Title III processes.
Sánchez Sifonte referred to the FAFAA the questions over the cost for attorneys. By press time, the FAFAA had not provided the information. According to documentation provided by the on-line portal of the Office of Management and Budget, the FAFAA has been assigned $40 million for fiscal 2016-17, which ends next June 30.
Sánchez Sifonte rejected that the arrival of new legal firms to the case of Puerto Rico will affect the rehabilitation process which is estimated to be complex and long.
“The litigation is new. This is only beginning. No Title III has ever been heard,” he noted.
💬See 0 comments