Lawyers or chief executives of about 19 entities, including the Board and the Puerto Rico Fiscal Agency & Financial Advisory Authority (FAFAA) are required to participate today in the first meeting convened by the Mediation Team for the cases of Title III of Puerto Rico.
The mediation conclave will be presided by Judge Barbara J. Houser, who a few weeks ago was designated by Judge Laura Taylor Swain to lead the team of five judges who will be responsible for enabling Puerto Rico and its creditors to reach agreements to reduce public debt and other obligations with pensioners, suppliers and employees.
Although it is mandatory, the meeting will be organizational in nature, so no substantive matters will be discussed, as the order says.
In the same way, the meeting, which will be held at the Daniel Patrick Moynihan Building, home of the Southern District Court of New York, will be confidential and press access will not be allowed.
On June 23rd, Swain ordered the creation of the mediation committee, a decision that, as sources indicate, shows "the high priority" given by the Judicial Conference of the United States to the Puerto Rico case.
The ball in the Judiciary
According to sources since the first request of Title III of PROMESA for Puerto Rico, on May 3rd, the Federal Judiciary - headed by presiding Judge John G. Roberts - has deployed a "significant" amount of resources to the Southern District of New York and especially to the district of Puerto Rico where Title III cases are settled.
Among other things, apart from the transfers of judges and other court officials, as sources told this newspaper, the federal judiciary has dedicated resources to facilitate access to court proceedings, coordinating simultaneous transmission of hearings between New York and Puerto Rico and providing access to oral proceedings through telephone conference calls.
On the other hand, although this is paid by Puerto Rico as a debtor, the documents of the Title III cases are free of cost to the public, through the firms Prime Clerk and Epiq Bankruptcy Solutions, in the case of the Puerto Rico Electric Power Authority (PREPA)
Three women in charge
Apart from Houser, the Judicial Conference also endorsed that Judge G. Dein, judge of the District of Massachusetts, assist Swain with Title III cases. With the designation of Swain, Houser and Dein, the Federal Judiciary has entrusted the largest municipal bankruptcy lawsuit in US history to three women.
In a way, the solution to two decades of economic stagnation in Puerto Rico is now delegated to the US Judiciary - in the figure of Swain and in turn, in the Mediation Team. This, after the failure of the territorial government policies, as well as the US Congress that by law, is the branch of the federal government with full power over Puerto Rico. A year ago, after the lobbying of Puerto Rico, the federal executive and the creditors who now demand their payment, the bankruptcy process in Court, was the remedy provided by Congress to the Island.
Houser, who during the June 28th hearing in Puerto Rico remarked the benefits of mediation, seeks to have the parties choose this complaint resolution mechanism instead of investing millions of dollars in a judicial, risk-filled process.
At present, Puerto Rico faces 14 judicial processes since the beginning of Title III cases. Among others, investors, unions, citizens organizations, trustees, suppliers and municipal insurers seek to invalidate the fiscal plan and protect from the government the money alleged to be paid to bondholders.
In addition to Houser, who is the presiding judge of the Bankruptcy Court of the Northern District of Texas, the Puerto Rico Mediation Team includes Judge Thomas Ambro of the Third Circuit, Senior U.S. District Judge Nancy Atlas of Texas Southern District, U.S. Bankruptcy Judge Christopher Klein from the Eastern District of California and Senior Judge of the New York South District –and Puerto Rican- Victor Marrero
of Third Circuit Court Judge Thomas Ambro, South Texas District Judge Nancy Atlas , The bankruptcy judge for the Eastern District of California, Christopher Klein, and the Southern District Judge of the Southern District of Puerto Rico, Víctor Marrero.
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