Things Are So Bad in Puerto Rico the Island Canceled Its Bankruptcy Case in San JuanBy
Bankruptcy lawyers can’t get rooms at their favorite spots
Judge moved December court hearing from San Juan to New York
The lawyers always win.
So many of San Juan’s swankiest hotels remain closed from hurricane damage that a federal judge canceled plans to bring Puerto Rico’s historic, $74 billion bankruptcy case back to the island.
Before Hurricane Maria pummeled Puerto Rico in September, causing so much damage that electricity still isn’t fully restored, San Juan’s hottest hotels would fill up with highly paid bankruptcy advisers attending the regular, two-day hearings held by U.S. District Court Judge Laura Taylor Swain. After the hurricane, Swain suspended her visits to Puerto Rico, saying she would return to hold court there again in December, once the island had recovered.
On Friday, Swain decided against that, issuing a minor scheduling order that cited the difficulty lawyers and financial advisers were having getting hotel and airline reservations.
“The Court has reluctantly decided to conduct the December Omnibus Hearing in New York,” Swain wrote. The hearing is now set to take place in Manhattan Dec. 20.
Dozens of lawyers and financial advisers sent by bondholders have been appearing at every court hearing, reflecting the high stakes in the record municipal bankruptcy.
While some advisers, many of whom are based in New York, may have welcomed the Caribbean getaway, they will be much closer to home the week before Christmas than originally planned. As the old bankruptcy saw goes: sometimes the only winners in a case are the lawyers.
The case is In re Commonwealth of Puerto Rico, 17-03283, U.S. District Court, District of Puerto Rico (San Juan).