Welcome to Scribd, the world's digital library. Read, publish, and share books and documents. See more
Download
Standard view
Full view
of .
Look up keyword
Like this
1Activity
0 of .
Results for:
No results containing your search query
P. 1
Google Translation of PR Public Corporation Restrucuting Act - Google Drive

Google Translation of PR Public Corporation Restrucuting Act - Google Drive

Ratings: (0)|Views: 147|Likes:
Published by John E. Mudd
PR chapter 9 English
PR chapter 9 English

More info:

Categories:Types, Legal forms
Published by: John E. Mudd on Mar 14, 2014
Copyright:Attribution Non-commercial

Availability:

Read on Scribd mobile: iPhone, iPad and Android.
download as PDF, TXT or read online from Scribd
See more
See less

03/18/2014

pdf

text

original

 
1COMMONWEALTH OF PUERTO RICOth
17
 rdAssembly
3
 Session Legislative Regula
SENATE PUERTO RICO
P. S. ____ 
March 2014Presented by Senators
 Rosa Rodriguez
and
 Power Nadal  Referred to theCommittee on____________________ 
L
AW
To create the "Restructuring Act Public Corporations", to provide for the restructuring  process to be followed in the event of insolvency prosecutor of a public corporation, establish its applicability and scope and to establish the process to be followed in such cases,., and express their translation into English
EXPLANATORY MEMORANDUM
The Legislature of Puerto Rico understands prevailing delete the existing legal uncertainty about a possible economic insolvency of public corporations. Such uncertainty has undermined investor confidence in the government, thus affecting access to financing  by public corporations and the Commonwealth. Faced with a potential fiscal insolvency, the least onerous remedy is that both employees and creditors to negotiate a plan to facilitate the restructuring of financial obligations. This measure provides us with a well designed method that will address these situations in an efficient and organized manner.Legislation regarding financial insolvency is among the most important legal rules of          a jurisdiction. The U.S. Constitution authorizes Congress to establish laws regarding this matter. However, states are not without tools to address the issue of economic insolvency. The Commonwealth of Puerto Rico has legal access to these tools because for these  particular issues has the same level of autonomy and a federated state equivalent treatment. 
 
2
 Examining Board v Flores de
Otero,426 U.S. 572, 594 (1976). Governments, in the exercise of their police power of the state
(policepower)
have within their power to pass legislation to address the insolvency of legal and natural persons. As part of that power is the power of the courts to appoint trustees to administer insolvent companies. Similar legislation is widely accepted in the states, and has been particularly important in the liquidation and reorganization of companies in the technology industry. Mann, "An Empirical Investigation of Liquidation Choices of Failed High Tech Firms", 82 Wash. ULQ 1375 (2004). The existence of these remedies seeks to eliminate the legal uncertainty about the rights of creditors that is so detrimental to the business environment.The only law in our legal system that caters insolvency is Chapter XVII of the Civil Code. However, this rule is outdated and lacks the necessary procedural law to be implemented effectively.In deference to the fiscal autonomy of the Commonwealth of Puerto Rico, federal law does not occupy the field in this area. The usual federal remedies are not available to restructure the debt of public corporations and municipalities of Puerto Rico. The Constitution of the United States in its Section 8, Article I empowers Congress to establish uniform laws on economic insolvency. However, for centuries the Supreme Court of the United States has recognized that while this power is not exercised by Congress, states are not prevented from legislating on the subject.
 Sturges v
Crowinshield,17 U.S. 122, 196 (1819). Once Congress passed legislation on the subject, he held the field in relation to debtors that are covered by federal law. However, federal law explicitly excludes Puerto Rico Chapter 9 of the Bankruptcy Code. 11 USC 101 (52). This chapter contains the means to restructure the debt of municipalities, which for purposes of this Chapter  includes public corporations. The only way that Puerto Rico would be unable to legislate on the subject, in the absence of federal law, is whether the Bankruptcy Code prevents it. Such impairment, governed by the doctrine of "occupied field", not presumed if not explicit. 
 Altria Group, Inc. v.
Good,555 U.S. 70, 76 (2008). If Chapter 9 does not apply to Puerto
 
Rico, it could hardly be concluded that the field is occupied in the case of public corporations.
 
3The Supreme Court of the United States has decided that was the intent of Congress invest the Commonwealth of Puerto Rico of rights and similar to a federal state authority. The First Circuit Court of Appeals has ruled that Puerto Rico is sovereign, that was the main consideration that motivated the Supreme Court in
 Asbury
Park.
 U.S. v.
 
 Andino
Lopez,831 F.2d 1164, 1168 (1st. Cir. 1987), cert. denied 486 U.S. 1034 (1988). Consequently, this Legislature has the power to make a law directed to give certainty to creditors on the possibility of restructuring the debt of eligible public corporations.Existing loophole in our system creates uncertainty unacceptable. Under these circumstances this Legislature hereby establishes a system to reorganize debts and obligations, support the federal legislation so permits.
 Sturges v.
Crowinshield,supra;
 Brown
 
v.
Smart,145 U.S. 454, 457 (1892),
 International Shoe Company v.
Pinkus,278 U.S. 261, 264 (1929). The restructuring of these government debts can benefit both public corporations as bondholders receiving the certainty it provides a specific legal framework  for this.
 Asbury
Park,316 U.S. 502, 504 (1942), cited with approval in
 U.S. Trust Co. . of  
 
 New York v. New Jersey
 431 U.S. 1, 28 (1977). This Act aims to implement this authority
 
of the Commonwealth of Puerto Rico within the framework of its constitutional relationship with the United States of America.This Act creates a process for eligible public corporations to restructure their debts under the supervision of the Court and consensus with creditors. That way we can protect our public corporations while fulfilling our obligation to the creditors. This Act incorporates the scrutiny demanded the Supreme Court of the United States at
 U.S. Trust 
Co.,supra to modify debt agreements. Thus, the public interest to have efficient public corporations while the rights of the bondholders and other creditors are protected is protected:..
ENACTED BY THE LEGISLATURE OF PUERTO RICO
Section 1 - the "Law on Restructuring of Public Corporations" is created, known in English as "Public Corporation Restructuring Act" for its English text read as follows:

You're Reading a Free Preview

Download
scribd
/*********** DO NOT ALTER ANYTHING BELOW THIS LINE ! ************/ var s_code=s.t();if(s_code)document.write(s_code)//-->