Manchin, Committee Consider Puerto Rico Recovery Accuracy In Disclosures Act

Legislation aims to bolster disclosures by professionals involved in Puerto Rico bankruptcy cases

July 29, 2021

To watch a video of Senator Manchin’s opening remarks, please click here.

To watch a video of Senator Manchin’s questioning, please click here.

Washington, DC – Today, the U.S. Senate Energy and Natural Resources Committee held a hearing to consider S. 375 and its House-passed companion measure, H.R. 1192, the Puerto Rico Recovery Accuracy in Disclosures Act of 2021, commonly known as “PRRADA.” Senator Joe Manchin (D-WV), Chairman of the Committee, expressed support for increasing disclosure requirements in a practical and feasible manner that avoids adding to the already complicated bankruptcy situation in Puerto Rico.

“Puerto Rico’s bankruptcy cases, like any large corporate bankruptcy case or any municipal bankruptcy case, are complicated affairs. They require legions of lawyers and accountants and consultants and other professionals, all of whom expect to be paid for their work. In a corporate bankruptcy, the debtor cannot hire professional help without the bankruptcy court’s approval, and the court won’t approve hiring professionals until they disclose any potential conflicts of interest. That is not the case with municipal bankruptcies. To protect state sovereignty, Chapter 9 lets municipal governments hire professionals without court approval and without requiring applicants to disclose potential conflicts before they are hired. As Puerto Rico is a sovereign territory, PROMESA’s bankruptcy provisions were modeled after the municipal bankruptcy provisions in Chapter 9. The bill before us would change that and require professionals retained to work on cases under PROMESA to make the same sorts of disclosures that professionals must make in corporate bankruptcy cases. That strikes me as a sensible thing to do… It is my hope that this can be part of our discussion with our witnesses this morning and that it will help us find a way to increase disclosure and guard against conflicts of interest, which I support, but in a way that is more feasible and will not disrupt the pending cases,” Chairman Manchin said.

The hearing featured witnesses from the New York University School of Law, Seton Hall University School of Law, and Anthony Suarez Law Group, P.A. To read their testimony click here.

To watch the hearing in full, please click here.