The Committee has reached a settlement with the Oversight Board that significantly improves projected recoveries for general unsecured creditors of the Commonwealth under the proposed plan of adjustment. As a result of the Committee’s settlement, the Commonwealth plan of adjustment now provides cash consideration in the aggregate amount of $575 million to or for the benefit of general unsecured creditors, reflecting an improvement of approximately $414 million as compared to the Oversight Board’s prior proposal of $161 million in cash consideration. This represents a projected effective recovery rate of approximately 20% as compared to the Oversight Board’s prior proposal under which the projected recovery rate was only approximately 5%. Moreover, as part of the Committee’s efforts and the global settlement reached, the Committee was able to increase the threshold for Convenience Class treatment (which provides such creditors with a 100% recovery on account of their allowed claims (without post-petition interest)) from $10,000 per claim to $20,000 per claim.
For a more detailed discussion of the Committee’s settlement and the reasons the Committee agreed to reach this settlement, please see the Committee’s letter to general unsecured creditors, linked here, which will be sent to general unsecured creditors along with the ballots to be used for voting whether to accept or reject the plan. To read the disclosure statement click here, and to read the plan, click here.
The court confirmed the Commonwealth plan on January 18, 2022, and the effective date occurred on March 15, 2022.
The Committee plans to hold in-person events in Puerto Rico to provide information regarding the voting process in connection with the plan of adjustment. Please stay tuned for more details regarding these information sessions, which we hope to share with you soon.
THE SUMMARY OF THE TREATMENT OF GENERAL UNSECURED CREDITORS SET FORTH HEREIN IS QUALIFIED IN ITS ENTIRETY BY THE DISCLOSURE STATEMENT FOR THE SEVENTH AMENDED TITLE III JOINT PLAN OF ADJUSTMENT OF THE COMMONWEALTH OF PUERTO RICO, ET AL. [DOCKET NO. 17628] APPROVED BY THE COURT’S ORDER DATED AUGUST 2, 2021 [DOCKET NO. 17639].
INFORMATION PROVIDED TO YOU ON THE COMMITTEE’S WEBSITE IS FOR GENERAL INFORMATIONAL PURPOSES ONLY AND NOT FOR THE PURPOSE OF PROVIDING LEGAL ADVICE OF ANY NATURE, INCLUDING AS TO THE AMOUNT, NATURE, OR SECURED OR PRIORITY STATUS OF ANY CLAIM. YOU SHOULD CONSULT YOUR ATTORNEY TO OBTAIN LEGAL ADVICE WITH RESPECT TO ANY PARTICULAR ISSUE. USE OF THE COMMITTEE’S WEBSITE DOES NOT CREATE AN ATTORNEY-CLIENT RELATIONSHIP WITH ANY ADVISOR TO THE CREDITORS’ COMMITTEE.