Court confirms COFINA’s Title III Plan of Adjustment

On February 4, 2019, the U.S. District Court for the District of Puerto Rico issued the Order and Judgment Confirming the Third Amended Title III Plan of Adjustment of Puerto Rico Sales Tax Financing Corporation (COFINA). The document is Case No. 17-BK-3283-LTS / 17-BK-3284-LTS, Doc. 5048, filed that day under the label VERSION FEBRUARY 4, 2019.

The order declares the Plan — COFINA’s Third Amended Title III Plan of Adjustment — CONFIRMED pursuant to section 314(b) of PROMESA. The Oversight Board acts as Title III representative of the debtor. The text approves the compromise and settlement of the Commonwealth-COFINA Dispute incorporated into the Plan, and approves the Settlement Agreement as a good-faith, reasonable, fair and equitable compromise, with consummation subject to the Effective Date.

It also authorizes and incorporates findings and conclusions of law, and provides that objections are resolved per the confirmation-hearing record. Ownership of so-called COFINA Revenues, sales-tax covenants and the Plan’s distributions and transfers remain conditioned on the Effective Date occurring: the order uses the formula subject to the occurrence of and upon the Effective Date.

Judicial confirmation is not the Effective Date, is not automatic issuance of new bonds, and is not a reconstruction disbursement. The document does not invent a theft of public funds: it is a Title III judgment on the sales-tax financing corporation’s plan of adjustment.

This note sticks to PDF Doc. 5048 hosted on promesa.prd.uscourts.gov. Bond-face amounts or debt-service savings that appear only in later Board or AAFAF releases are not imported here.

Indemnification, exculpation and releases among COFINA, Reorganized COFINA and Commonwealth agents remain, per the order, tied to the Effective Date and to the terms of the Plan and Settlement Agreement.

Cousin: none. Primary: COFINA confirmation order, February 4, 2019.