No rush to bankruptcy
As a follow up to our post yesterday on Governor Ricardo Rosselló’s administration pursuing Corey Lewandowski’s firm to lobby Donald Trump, and its misleading claims that Rosselló will negotiate with creditors because he prefers to do so, this #Bocaito to Control Board Watch. The post is a bit on the wonky side, but explains why negotiations are not optional, being mandated by PROMESA.
As of this writing, the PR Supervisory Board insists on having a fiscal plan approved on or before January 31st. This gives the new administration, which will bear the brunt of the start of the fiscal plan, very little time to contribute to the final version. Today, new Governor Ricardo Rosselló has asked the Board to extend both its deadline for the fiscal plan and the PROMESA stay, which is set to expire on February 15 as things stand.
To me, the governor’s request makes perfect sense. It’s also perfectly in line with what PROMESA actually says. Why should the Board rush to have the Fiscal Plan in place, without giving the new administration time to assess the situation and weigh in? After all, Congress has made clear that the true goal of PROMESA is to promote and facilitate consensual negotiation between the government and its many creditors – something that would be made all the more difficult if that government is rushed to adopt a plan with which it is not comfortable.
Though I have heard some say the Board wants a Fiscal Plan in place BEFORE it can seek an extension of the stay, this is contrary to the clear language of PROMESA.
Legal writing can be, and often is confusing. But in this case there are clear requirements that should be evident to anyone doing basic research on this topic.