U.S. House of Representatives passes the Puerto Rico Recovery Accuracy in Disclosures Act of 2021
The House and Senate are now seeking PRRADA’s signature approval from President Joe Biden.
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The House of Representatives on Wednesday, Jan. 19, gave a greenlight to move the process forward in hopes to implement the Puerto Rico Recovery Accuracy in Disclosures Act (PRRADA).
With the announcement of Puerto Rico’s debt adjustment plan being approved by a federal judge on Tuesday, Congress members are working quickly to see PRRADA measures in effect.
U.S. Senators Bob Menendez (D-N.J.) and Marco Rubio (R-Fla.), as well as Congresswoman Nydia Velázquez (D-N.Y.-07) opposed the previous financial standard passed by Congress in 2016.
They argued that the Puerto Rico Oversight, Management, and Economic Stability Act (PROMESA), had “loopholes” and failed to “disclose conflicts of interests with creditors.”
Menendez said that PROMESA did not have this requirement in place during bankruptcy for its “advisers, accountants, and other professionals involved in the debt restructuring process.”
“The people of Puerto Rico will finally have the long overdue transparency they deserve in the debt restructuring process,” said Menendez.
PRRADA will require all professionals, including the Financial Oversight and Management Board, to first verify any connections with creditors or parties before compensation can be distributed.
Puerto Rico’s debt restructuring plan looks to consolidate nearly $33 billion in existing claims, a press statement noted.
“This bill will help to restore confidence that the Board’s bankruptcy advisors do not have their ‘thumb on the scale’ to favor certain debts where they have a self-interest,” Velázquez said.