The Chief Justice of the United States Supreme Court, John G. Roberts Jr., could appoint at any moment the judge who will preside over the petition for protection under Tittle III of PROMESA that the Oversight Board filed yesterday on behalf of Puerto Rico.
According to sources of this daily, the high court of the US has for some weeks been reviewing candidates to preside over the case of Puerto Rico, while the federal district court of Puerto Rico, has discreetly, begun to modify some of its internal proceedings to prepare for what could be one of the most complex municipal bankruptcy trials in United States jurisprudence.
Yesterday, The United States Supreme Court would only confirm to El Nuevo Día that in fact, Chief Justice Roberts will appoint a district judge to hear the case, as established in section 308 of PROMESA.
Last week, the spokesperson for the federal district court of Puerto Rico, Jorge Soltero, told this daily that they were analyzing several measures to hear to cases filed under PROMESA in that venue, but gave no further details.
To date, the Island’s district court has taken some measures to work with the cases under PROMESA. For example, judge Francisco A. Besosa proposed amending the civil procedural rules to expedite the filing of cases through title VI of PROMESA, a proposal that the Court’s clerk communicated to lawyers admitted to that venue. That for them to provide their comments on or before next May 12.
According to PROMESA, to hear cases under that statute, it is possible that the federal district court may provide court resources to support the judge hearing the appeals before him.
On the other hand, the court’s digital document system was modified to include, among the classification, terms such as “PROMESA” and “Tittle III”.
However, according to former bankruptcy judge Gerardo Carlo-Altieri, Chief Justice Roberts will have ample discretion to determine whether the bankruptcy petition filed by the Government and another handful of petitions to be filed in the coming days will be heard in Puerto Rico.
According to Carlo-Altieri, the “most appropriate” would be to appoint a district judge who could be from Puerto Rico, but also from within the judicial circuit to which the Island belongs. In other words, the region covered by the First Circuit (Court) of Appeals.
“The case was filed in Puerto Rico, but he (Chief Justice Roberts) may take the case to a neutral venue,” said Carlo-Altieri, which could mean settling Puerto Rico’s situation in the district of New York or Washington, D.C., for instance.
According to PROMESA, Roberts would have to appoint the presiding judge for the title III petition corresponding to the central government.
But in case of petitions by public corporations, if filed separately, PROMESA establishes that it will be up to the judge presiding over the Circuit of Appeals to appoint the magistrate who would hear those petitions.
The Aurelius case
According to Carlo-Altieri, for the central Government the petition under Tittle III has the effect of halting any litigations against it unless judicially revoked and according to PROMESA, any litigation on the matter must be settled in the federal venue. However, the former judge said that wouldn’t necessarily happen with the Aurelius suit and with a dozen hedge funds.
On Tuesday, availing themselves of the end to the automatic stay on litigations against Puerto Rico, the owners of just 12% of all the General Obligations (GOs) went to the state court of New York and sued Puerto Rico, demanding payment of $245 million, even if that meant depleting the funds existing in the Treasury Department.
“98% of the General Obligations bonds are subject to the laws of Puerto Rico, but this 2014 bond issue was made under the laws of the state of New York,” Carlo-Altieri explained.
As a result, according to the expert, the OB could petition to transfer the case to the district court of New York, but it could also be possible for the judge assigned to that dispute to hear or paralyze the controversy in that venue. Yesterday, the New York judicial system assigned the Aurelius case to judge Anil Singh.
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