COMMONWEALTH OF PUERTO RICO Bankruptcy Filing

Basic Information on COMMONWEALTH OF PUERTO RICO Bankruptcy

COMMONWEALTH OF PUERTO RICO filed a 9 chapter bankruptcy in the Puerto Rico bankruptcy court on May 03, 2017. This is a voluntary filing; it was assigned the bankruptcy case number #17-03283.

The bankruptcy petition for COMMONWEALTH OF PUERTO RICO showed assets in the range of Not in Database with liabilities in the range of Not in Database. COMMONWEALTH OF PUERTO RICO reports that the number of creditors is in the range of Not in Database.

The debtor indicated their nature of business as Not in Database. The options for nature of business in bankruptcies are rather limited and archaic. They include 'Health Care Business', 'Single Asset Real Estate', 'Railroad', 'Stockbroker', 'Commodity Broker', 'Clearing Bank', or 'None of the Above'.

The COMMONWEALTH OF PUERTO RICO bankruptcy is still open. BankruptcyObserver's database shows the latest docket entry was made on September 26,2022.

Unsecured Creditor Treatment in COMMONWEALTH OF PUERTO RICO Bankruptcy:

COMMONWEALTH OF PUERTO RICO indicated on its bankruptcy petition that it does not expect there will be sufficient assets in the estate to make a payment to the unsecured creditors.

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COMMONWEALTH OF PUERTO RICO Bankruptcy Docket Header

PROMESA, APPEAL, Magistrate_Judge, INTAPPEAL, DeBN-Yes




United States District Court
District of Puerto Rico (Old San Juan)
CIVIL DOCKET FOR CASE #: 17-03283-LTS

Assigned to: LAURA TAYLOR SWAIN
Title III
Voluntary
Unknown assets


Date filed:  05/03/2017

Debtor
COMMONWEALTH OF PUERTO RICO
FINANCIAL OVERSIGHT & MANAGEMENT BOARD
JACOB JAVITS FEDERAL BLDG
26 FEDERAL PLAZA
RM 2-128
NEW YORK, NY 10278
NEW YORK-NY

rep. by PHILIP M ABELSON
Proskauer Rose
11 Times Square
New York, NY 10036
212-969-4150
Fax : 212-969-2900
Email:
 pabelson @ proskauer.com
TERMINATED: 07/13/2017

JULIA D. ALONZO
Proskauer Rose LLP
Eleven Times Square
New York, NY 10036
212.969.3000
Fax : 212.969.2900
Email:
 jalonzo @ proskauer.com

GINGER D. ANDERS
Munger, Tolles & Olsen LLP
1155 F Street N.W.
Washington, DC 20004-1357
(202) 220-1100
Fax : (202) 220-2300
Email:
 Ginger.Anders @ mto.com

EHUD BARAK
Proskauer Rose LLP
11 Times Square
New York, NY 10036
212-969-4247
Fax : 212-969-2000
Email:
 ebarak @ proskauer.com

HERMANN D BAUER ALVAREZ
O'NEILL & BORGES
AMERICAN INTERNATIONAL PLAZA
SUITE 800
250 MUNOZ RIVERA AVE
SAN JUAN, PR 00918
787-282-5723
Fax : 787-753-8944
Email:
 herman @ oneillborges.com

MARTIN J. BIENENSTOCK
Proskauer Rose LLP
11 Times Square
New York, NY 10036
212-969-4530
Fax : 212-969-2900
Email:
 mbienenstock @ proskauer.com

BRADLEY R. BOBROFF
Proskauer Rose LLP
Eleven Times Square
New York, NY 10036
212-969-3000
Fax : 212-969-2900
Email:
 Bbobroff @ proskauer.com

GUY BRENNER
Proskauer Rose LLP
1001 Pennsylvania Ave. NW
Suite 600 South
Washington, DC 20004
202-416-6830
Email:
 gbrenner @ proskauer.com

RICARDO BURGOS VARGAS
PO BOX 8448
SAN JUAN, PR 00910
787-948-1025
Email:
 rburgoslaw @ gmail.com

WANDYMAR BURGOS VARGAS
Department of Justice of PR
P.O. Box 9020192
San Juan, PR 00910
Email:
 wburgos @ justicia.pr.gov

LUCIA CHAPMAN
LUSKIN, STERN & EISLER LLP
ELEVEN TIMES SQUARE
NEW YORK, NY 10036
212-597-8215
Fax : 212-974-3205
Email:
 CHAPMAN @ LSELLP.COM

Valerie Concepcion-Cintron
787-459-2799
Email:
 lic.valerie.concepcion @ gmail.com

MARGARET A. DALE
Proskauer Rose LLP
Eleven Times Square
New York, NY 10036
(212) 969-3315
Fax : (212) 969-2900
Email:
 mdale @ proskauer.com

WILLIAM D. DALSEN
Proskauer Rose LLP
One International Place
Boston, MA 02110
617-526-9429
Fax : 617-526-9899
Email:
 wdalsen @ proskauer.com

PETER D. DOYLE
Proskauer Rose LLP
Eleven Times Square
New York, NY 10033

ADELE M. EL-KHOURI
Munger, Tolles & Olson LLP
1155 F Street N.W.
Washington, DC 20004-1357
(202) 220-1100
Fax : (202) 220-2300
Email:
 Adele.El-Khouri @ mto.com

UBALDO M FERNANDEZ BARRERA
O'NEILL & BORGES
AMERICAN INTERNATIONAL PLAZA
250 MUNOZ RIVERA AVE
SUITE 800
SAN JUAN, PR 00918
787-764-8181
Fax : 787-753-8944
Email:
 ubaldo.fernandez @ oneillborges.com

MICHAEL A. FIRESTEIN
Proskauer Rose LLP
2049 Century Park East, 32nd Floor
Los Angeles, CA 90067-3206
310-557-2900
Fax : 310-557-2193
Email:
 Mfirestein @ proskauer.com

CARL FORBES, JR.
Proskauer Rose LLP
Eleven Times Square
New York, NY 10036
212-969-3000
Fax : 212-969-2900
Email:
 cforbes @ proskauer.com

CARLA GARCIA BENITEZ
O'NEILL & BORGES LLC
250 MUNOZ RIVERA AVE.
SUITE 800
SAN JUAN, PR 00918-1813
787-282-5737
Fax : 787-753-8944
Email:
 carla.garcia @ oneillborges.com

CHAD I. GOLDER
Munger, Tolles & Olson LLP
1155 F Street N.W.
Washington, DC 20004-1357
(202) 220-1100
Fax : (202) 220-2300
Email:
 Chad.Golder @ mto.com

MICHAEL R. HACKETT
Proskauer Rose LLP
One International Place
Boston, MA 02110
Email:
 mhackett @ proskauer.com

MARK D. HARRIS
Proskauer Rose LLP
11 Times Square
New York, NY 10036
212.969.3000
Fax : 212.969.2900
Email:
 mharris @ proskauer.com

STEPHAN E. HORNUNG
Luskin, Stern & Eisler LLP
Eleven Times Square
New York, NY 10036
212-597-8245
Fax : 212-974-3205
Email:
 hornung @ lsellp.com

JEFFREY W. LEVITAN
Proskauer Rose, LLP
Eleven Times Square
New York, NY 10036
212-969-3000
Fax : 212-969-2900
Email:
 JLevitan @ proskauer.com

MICHAEL LUSKIN
LUSKIN, STERN & EISLER LLP
ELEVEN TIMES SQUARE
NEW YORK, NY 10036
212-597-8220
Fax : 212-974-3205
Email:
 LUSKIN @ LSELLP.COM

GREGG M. MASHBERG
Proskauer Rose LLP
Eleven Times Square
New York, NY 10036
212.969.3450
Fax : 212.969.2900
Email:
 gmashberg @ proskauer.com

RACHEL G. MILLER ZIEGLER
Munger, Tolles & Olson LLP
1155 F. Street N.W. 7th Floor
Washington, DC 20004-1357
202.220.1100
Fax : 202.220.2300
Email:
 rachel.miller-ziegler @ mto.com

GABRIEL MIRANDA RIVERA
ONeill & Borges LLC
250 Munoz Rivera
Ste 800
San Juan, PR 00918-1813
787-764-8181
Email:
 gabriel.miranda @ oneillborges.com

MATTHEW J. MORRIS
Proskauer Rose LLP
Eleven Times Square
New York, NY 10036
(212) 969-3144
Fax : (212) 969-2900
Email:
 MMorris @ proskauer.com

TIMOTHY W. MUNGOVAN
Proskauer Rose LLP
One International Place
Boston, MA 02110
617-526-9412
Fax : 617-526-9899
Email:
 tmungovan @ proskauer.com

DANIEL J PEREZ REFOJOS
ONEILL & BORGES LLC
250 MUNOZ RIVERA AVE
SUITE 800
SAN JUAN, PR 00918
787-764-8181
Email:
 daniel.perez @ oneillborges.com

KEVIN J. PERRA
Proskauer Rose LLP
11 Times Square
New York, NY 10036
212-969-3454
Fax : 212-969-2900
Email:
 KPerra @ proskauer.com

PAUL V. POSSINGER
Proskauer Rose LLP
70 West Madison
Suite 3800
Chicago, IL 60602-4342
312-962-3570
Fax : 312-962-3551
Email:
 ppossinger @ proskauer.com

Susana I Penagaricano-Brown
Puerto Rico Department of Justice
P.O. Box 9020192
San Juan, PR 00902-0192
787-721-2948
Fax : 787-723-9188
Email:
 penagaricanobrownusdc @ gmail.com

LARY ALAN RAPPAPORT
Proskauer Rose LLP
2049 Century Park East
32nd Floor
Los Angeles, CA 90067-3206
310-284-5658
Fax : 310-557-2193
Email:
 Lrappaport @ proskauer.com

STEPHEN L. RATNER
Proskauer Rose LLP
11 Times Square
New York, NY 10036
212-969-3290
Fax : 212-969-2900
Email:
 sratner @ proskauer.com

JENNIFER L. ROCHE
Proskauer Rose LLP
2049 Century Park East
32nd Floor
Los Angeles, CA 90067-3206
310-557-2900
Fax : 310-557-2193
Email:
 jroche @ proskauer.com

BRIAN S. ROSEN
Proskauer Rose LLP
Eleven Times Square
New York, NY 10036
212-969-3000
Fax : 212-969-2900
Email:
 brosen @ proskauer.com

Juan Carlos Ramirez-Ortiz
P.O. Box 9020192
San Juan, PR 00902-0192
787-721-2900
Email:
 juramirez @ justicia.pr.gov

Scott Rutsky
Proskauer Rose LLP
11 Times Square
New York, NY 10036
212-969-3983
Fax : 212-969-2900
Email:
 srutsky @ proskauer.com

LAURA STAFFORD
Proskauer Rose LLP
One International Place
Boston, MA 02110
(617) 526-9714
Fax : (617) 526-9899
Email:
 lstafford @ proskauer.com

CHRIS THEODORIDIS
Proskauer Rose LLP
Eleven Times Square
New York, NY 10036-8299
212.969.4244
Fax : 212.969.2900
Email:
 ctheodoridis @ proskauer.com

DONALD B. VERRILLI
Munger, Tolles & Olson LLP
1155 F Street N.W.
Washington, DC 20004-1357
(202) 220-1100
Fax : (202) 220-2300
Email:
 Donald.Verrilli @ mto.com

STEVEN O. WEISE
Proskauer Rose LLP
2049 Century Park East
Suite 3200
Los Angeles, CA 90067-3206
310-284-4515
Fax : 310-557-2193
Email:
 sweise @ proskauer.com

JARED D. ZAJAC
Proskauer Rose, LLP
Eleven Times Square
New York, NY 10036
212-969-3000
Fax : 212-969-2900
Email:
 jzajac @ proskauer.com

MAJA ZERJAL
Proskauer Rose LLP
11 Times Square
New York, NY 10036
212-969-4245
Fax : 212-969-2900
Email:
 mzerjal @ proskauer.com

Debtor
PUERTO RICO SALES TAX FINANCING CORPORATION (COFINA), Depository Trust Company
JACOB JAVITS FEDERAL BLDG
26 FEDERAL PLAZA
RM 2-128
NEW YORK, NY 10278
NEW YORK-NY
SSN / ITIN: xxx-xx-0000

rep. by ANN M. ASHTON
Proskauer Rose LLP
1001 Pennsylvania Avenue, NW
Suite 600 South
Washington, DC 20004
202.416.5825
Fax : 202.416.6899
Email:
 aashton @ proskauer.com

HERMANN D BAUER ALVAREZ
(See above for address)

MARTIN J. BIENENSTOCK
(See above for address)

GUY BRENNER
(See above for address)

RICARDO BURGOS VARGAS
(See above for address)

WILLIAM D. DALSEN
(See above for address)

CHANTEL L.. FEBUS
Proskauer Rose LLP
11 Times Square
New York, NY 10036
212.969.3429
Fax : 212.969.2900
Email:
 cfebus @ proskauer.com

UBALDO M FERNANDEZ BARRERA
(See above for address)

RALPH C. FERRARA
Proskauer Rose LLP
1001 Pennsylvania Avenue, NW
Suite 600 South
Washington, DC 20004
202.416.5820
Fax : 202.416.6899
Email:
 rferrara @ proskauer.com

CARL FORBES, JR.
(See above for address)

CARLA GARCIA BENITEZ
(See above for address)

MARK D. HARRIS
(See above for address)

JEFFREY W. LEVITAN
(See above for address)

GREGG M. MASHBERG
(See above for address)

KEVIN J. PERRA
(See above for address)

BRIAN S. ROSEN
(See above for address)

CHRIS THEODORIDIS
(See above for address)

JARED D. ZAJAC
(See above for address)

Debtor
PUERTO RICO HIGHWAYS AND TRANSPORTATION AUTHORITY
FINANCIAL OVERSIGHT & MANAGEMENT BOARD
JACOB JAVITS FEDERAL BLDG
26 FEDERAL PLAZA
RM 2-128
NEW YORK, NY 10278
NEW YORK-NY

rep. by HERMANN D BAUER ALVAREZ
(See above for address)

MARTIN J. BIENENSTOCK
(See above for address)

GUY BRENNER
(See above for address)

RICARDO BURGOS VARGAS
(See above for address)

RAUL CASTELLANOS-MALAVE
Development & Construction Law Group LLC
PMB 443, Suite 112
100 Grand Paseos Boulevard
San Juan, PR 00926-5910
7874032757
Fax : 8885001827
Email:
 castellanoslaw @ gmail.com

WILLIAM D. DALSEN
(See above for address)

UBALDO M FERNANDEZ BARRERA
(See above for address)

CARL FORBES, JR.
(See above for address)

CARLA GARCIA BENITEZ
(See above for address)

MARK D. HARRIS
(See above for address)

JEFFREY W. LEVITAN
(See above for address)

ANDRES W. LOPEZ
The Law Offices of Andres W. Lopez, P.S.C.
P.O. Box 13909
San Juan, PR 00908
787-294-9508
Email:
 andres @ awllaw.com
TERMINATED: 02/26/2018

GREGG M. MASHBERG
(See above for address)

DANIEL J PEREZ REFOJOS
(See above for address)

KEVIN J. PERRA
(See above for address)

BRIAN S. ROSEN
(See above for address)

CHRIS THEODORIDIS
(See above for address)

HADASSA R. WAXMAN
Proskauer Rose LLP
Eleven Times Square
New York, NY 10036
2129693565
Fax : 212-969-2900
Email:
 hwaxman @ proskauer.com

JARED D. ZAJAC
(See above for address)

Debtor
PUERTO RICO ELECTRIC POWER AUTHORITY
PO BOX 363928
SAN JUAN, PR 00936
SAN JUAN-PR

rep. by HERMANN D BAUER ALVAREZ
(See above for address)

MARTIN J. BIENENSTOCK
(See above for address)

GUY BRENNER
(See above for address)

Katiuska Bolanos
Diaz & Vazquez Law Firm, PSC
644 Fernandez Juncos Ave.
District View Plaza, Suite 301
San Juan, PR 00907-3122
(787) 395-7133
Fax : (787) 919-7319
Email:
 kbolanos @ diazvaz.law

WILLIAM D. DALSEN
(See above for address)

JOSEPH P. DAVIS, III
Greenberg Traurig, LLP
One International Place
Suite 2000
Boston, MA 02180
617.310.6204
Fax : 617.279.8403
Email:
 davisjo @ gtlaw.com

MARIA J. DICONZA
O'Melveny & Myers LLP
Times Square Tower
7 Times Square
New York, NY 10036
212-326-2144
Email:
 mdiconza @ omm.com

Arturo Diaz-Angueira
Diaz & Vazquez Law Firm, P.S.C.
644 Ave Fernandez Juncos
District View Plaza
Suite 301
San Juan, PR 00907-3122
(787) 679-7132
Fax : (787) 919-7319
Email:
 adiaz @ diazvaz.law

CARL FORBES, JR.
(See above for address)

CARLA GARCIA BENITEZ
(See above for address)

MARK D. HARRIS
(See above for address)

JEFFREY W. LEVITAN
(See above for address)

GREGG M. MASHBERG
(See above for address)

Michael Kelly Malone
King & Spalding LLP
1185 Avenue of the Americas
34th Floor
New York, NY 10036-2601
347-327-2416
Email:
 mkmalone @ kslaw.com

BRIAN S. ROSEN
(See above for address)

DANIEL S. SHAMAH
O'Melveny & Myers LLP
Times Square Tower
7 Times Square
New York, NY 10036
2123262138
Fax : 718-812-1541
Email:
 dshamah @ omm.com

HADASSA R. WAXMAN
(See above for address)

JARED D. ZAJAC
(See above for address)

Debtor
Puerto Rico Public Buildings Authority (PBA)
OUTSIDE U. S.

rep. by HERMANN D BAUER ALVAREZ
(See above for address)

Plaintiff
MBIA INSURANCE CORP.

rep. by Philippe Z Selendy
Selendy & Gay PLLC
1290 Avenue of the Americas
New York, NY 10104
212-390-9000
Email:
 pselendy @ selendygay.com

Defendant
Apex General Contractors LLC
San Francisco
105 Ave. De Diego
San Juan, PR 00911-3529

rep. by Luis E Pabon Roca
Faccio & Pabon Roca
249 Las Marias
Hyde Park
San Juan, PR 00927
787-764-1800
Fax : 787-777-0737
Email:
 lpabonroca @ microjuris.com

Clarisa Sola-Gomez
Faccio & Pabon Roca
P.O. Box 11397
Fernandez Juncos Station
San Juan, PR 00910-2497
787-764-1800
Fax : 787-777-0737
Email:
 clarisasola @ hotmail.com

U.S. Trustee
MONSITA LECAROZ ARRIBAS
OFFICE OF THE US TRUSTEE (UST)
OCHOA BUILDING
500 TANCA STREET SUITE 301
SAN JUAN, PR 00901

rep. by MONSITA LECAROZ ARRIBAS
OCHOA BLDG
500 TANCA ST STE 301
SAN JUAN, PR 00901-1922
787-729-7444
Fax : 729-7449
Email:
 Monsita.Lecaroz @ usdoj.gov

U.S. Trustee
US TRUSTEE-REGION 21

rep. by MONSITA LECAROZ ARRIBAS
(See above for address)

Intervenor
PV PROPERTIES, INC
PO BOX 13942
SAN JUAN, PR 00908
787-725-7562

rep. by FERNANDO E. AGRAIT
FERNANDO E. AGRAIT
701 PONCE DE LEON AVE.
SUITE 414
SAN JUAN, PR 00907
787-725-3390
Fax : 787-724-0353
Email:
 agraitfe @ agraitlawpr.com

Intervenor
PUERTO RICO MANUFACTURERS ASSOCIATION
PO BOX 195477
SAN JUAN, PR 00919-5477

rep. by FERNANDO E. AGRAIT
(See above for address)

Intervenor
ASOCIACION DE CONTRATISTAS DE ENERGIA RENOVABLE
PO BOX 16714
SAN JUAN, PR 00908-6714
Tax ID / EIN: 66-0707874

rep. by FERNANDO E. AGRAIT
(See above for address)

Intervenor
CAMARA DE MERCADEO, INDUSTRIA Y DISTRIBUCION DE ALIMENTOS
90 CARR 165 ST 501
GUAYNABO, PR 00968-8067
Tax ID / EIN: 66-0628831

rep. by FERNANDO E. AGRAIT
(See above for address)

Intervenor
CENTRO UNIDO DE DETALLISTAS
PO BOX 190127
SAN JUAN, PR 00919-0127

rep. by FERNANDO E. AGRAIT
(See above for address)

Intervenor
ASOCIACION DE RESTAURANTES DE PUERTO RICO
AVE. FRANKLIN DELANO ROOSEVELT # 1498
SUITE 205
GUAYNABO, PR 00968
787-783-9640

rep. by FERNANDO E. AGRAIT
(See above for address)

3rd Party Plaintiff
Aracelis Nazario Torres
PO Box 361204
San Juan, PR 00936-1204SA

rep. by CARLOS A RUIZ RODRIGUEZ
PO BOX 1298
CAGUAS, PR 00726
(787)286-9775
Fax : (787)747-2174
Email:
 carlosalbertoruizquiebras @ gmail.com

3rd Party Plaintiff
MARIA CONSUELO FIGUEROA TORRES
864 COM. CARACOLES #1
BUZON 864
PEUELAS, PR 00624
787-420-4808
SSN / ITIN: xxx-xx-8352

rep. by VANESSA HERNANDEZ RODRIGUEZ
LCDA. VANESSA HERNANDEZ RODRIGUEZ OFICINA DE ABOGADA
4140 STREET AURORA SUITE 1
PONCE, PR 00717-1203
787-548-6208
Fax : 787-840-0804
Email:
 hernandezrodriguez.v @ gmail.com

3rd Party Plaintiff
Nilda Agosto Maldonado Plaintiff Group

rep. by IVONNE GONZALEZ-MORALES
PO BOX 9021828
SAN JUAN, PR 00902-1828
787-410-0119
Email:
 ivonnegm @ prw.net

3rd Party Plaintiff
Cruz-Hernandez Plaintiff Group

rep. by IVONNE GONZALEZ-MORALES
(See above for address)

3rd Party Plaintiff
Consejo de Salud de la Comunidad de la Playa de Ponce, Inc.

rep. by CHARLES ALFRED CUPRILL
CHARLES A CURPILL, PSC LAW OFFICE
356 CALLE FORTALEZA
SECOND FLOOR
SAN JUAN, PR 00901
787 977-0515
Email:
 cacuprill @ cuprill.com

Counter-Defendant
Yolanda I. Correa Fonseca
   


There are proceedings for case 17-03283-LTS but none satisfy the selection criteria.


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What is a Chapter 9 Bankruptcy? What to Expect from a Chapter 9 Bankruptcy?

Bankruptcies in the United States are governed by federal rather than state law. This includes in small and individual bankruptcies. Anyone declaring bankruptcy files with a federal court in a region where the person or entity has some rational for association. (For organizations this reasoning behind choosing a particular bankruptcy court can become rather stretched. For example a company called Pacific Lumber which owned 210,000 acres of forest land in California, filed bankruptcy in Corpus Christi, Texas. This action has been derided as "venue shopping". The courts that have benefited the most from this behavior are the bankruptcy courts in Delaware, the Southern District of New York, and the Southern District of Texas. Joe Biden is infamous for aggressively protecting company's rights to venue shop as it favors his home state district.) Bankruptcy and the rights and rules related to bankruptcies appear in Title 11 of the United States Code, beginning at 11 U.S.C 101.

Typically when looking at bankruptcy, the first question to consider is what type of bankruptcy was filed. Types are typically called "chapters" because they correspond to specific chapters of the code inside of the Title 11. Strangely the Code is not like a book, that is there are some missing chapters. (These were probably removed by Congress in subsequent legislation?) So, when you say that this is a Chapter 11 bankruptcy, you mean that the bankruptcy follows the procedures outlined in chapter 11 of Title 11 of the U.S. Code, as amended. It's important to note the "as amended" because there have been several major changes throughout the years.

Chapter 7 bankruptcy, sometimes referred to as liquidation bankruptcy, is the most basic form of bankruptcy. Both individuals and entities (corporations, trusts, partnerships, limited liability companies) can file chapter 7. Unlike chapter 11 or chapter 13 bankruptcies, Chapter 7 Bankruptcies do not involve the filed of plan or reorganization or a plan of repayment. Chapter 7 provides for the liquidation or sale of the debtor’s property with the proceeds distributed to the debtor's creditors. Some assets, primarily for individuals, are "exempt" meaning that the debtor is allowed to keep the property and any creditor liens are removed. The liquidation is most often performed by a Chapter 7 trustee who may operate the business while an orderly sale is organized. The trustee is paid from the proceeds of the asset liquidation.

Individuals filing for chapter 7 must meet a specific means test, failure to meet the test will push the debtor to either a Chapter 13 or Chapter 11 bankruptcy. In Chapter 7 bankruptcy, the absolute priority rule stipulates the order in which debts are to be paid. Under this rule unsecured debt is separated into classes or categories, with each class receiving priority for payment. Secured debt is debt backed or secured by collateral to reduce the risk associated with lending, such as a mortgage. Unsecured priority debts are paid first. Examples of unsecured priority debts are tax debts, child support, and personal injury claims against the debtor. Secured debts are paid next. Last is the payment of nonpriority, unsecured debt with funds remaining from the liquidation of assets. If there are not sufficient funds to pay the nonpriority unsecured debt, then the debts are paid on a pro-rata basis.

A chapter 7 case begins with the debtor filing a petition with the bankruptcy court serving the area where the individual lives or where the business debtor is organized or has its principal place of business or principal assets. (3) In addition to the petition, the debtor must also file with the court: (1) schedules of assets and liabilities; (2) a schedule of current income and expenditures; (3) a statement of financial affairs; and (4) a schedule of executory contracts and unexpired leases. Fed. R. Bankr. P. 1007(b). Debtors must also provide the assigned case trustee with a copy of the tax return or transcripts for the most recent tax year as well as tax returns filed during the case (including tax returns for prior years that had not been filed when the case began). 11 U.S.C. § 521. Individual debtors with primarily consumer debts have additional document filing requirements. They must file: a certificate of credit counseling and a copy of any debt repayment plan developed through credit counseling; evidence of payment from employers, if any, received 60 days before filing; a statement of monthly net income and any anticipated increase in income or expenses after filing; and a record of any interest the debtor has in federal or state qualified education or tuition accounts. Id. A husband and wife may file a joint petition or individual petitions. 11 U.S.C. § 302(a). Even if filing jointly, a husband and wife are subject to all the document filing requirements of individual debtors.

Filing a petition under chapter 7 "automatically stays" (stops) most collection actions against the debtor or the debtor's property. 11 U.S.C. § 362. But filing the petition does not stay certain types of actions listed under 11 U.S.C. § 362(b), and the stay may be effective only for a short time in some situations. The stay arises by operation of law and requires no judicial action. As long as the stay is in effect, creditors generally may not initiate or continue lawsuits, wage garnishments, or even telephone calls demanding payments. The bankruptcy clerk gives notice of the bankruptcy case to all creditors whose names and addresses are provided by the debtor.

Between 21 and 40 days after the petition is filed, the case trustee (described below) will hold a meeting of creditors. If the U.S. trustee or bankruptcy administrator (5) schedules the meeting at a place that does not have regular U.S. trustee or bankruptcy administrator staffing, the meeting may be held no more than 60 days after the order for relief. Fed. R. Bankr. P. 2003(a). During this meeting, the trustee puts the debtor under oath, and both the trustee and creditors may ask questions. The debtor must attend the meeting and answer questions regarding the debtor's financial affairs and property. 11 U.S.C. § 343. If a husband and wife have filed a joint petition, they both must attend the creditors' meeting and answer questions. Within 10 days of the creditors' meeting, the U.S. trustee will report to the court whether the case should be presumed to be an abuse under the means test described in 11 U.S.C. § 704(b).

When a chapter 7 petition is filed, the U.S. trustee (or the bankruptcy court in Alabama and North Carolina) appoints an impartial case trustee to administer the case and liquidate the debtor's nonexempt assets. 11 U.S.C. §§ 701, 704. If all the debtor's assets are exempt or subject to valid liens, the trustee will normally file a "no asset" report with the court, and there will be no distribution to unsecured creditors. Most chapter 7 cases involving individual debtors are no asset cases. But if the case appears to be an "asset" case at the outset, unsecured creditors (7) must file their claims with the court within 90 days after the first date set for the meeting of creditors. Fed. R. Bankr. P. 3002(c). A governmental unit, however, has 180 days from the date the case is filed to file a claim. 11 U.S.C. § 502(b)(9). In the typical no asset chapter 7 case, there is no need for creditors to file proofs of claim because there will be no distribution. If the trustee later recovers assets for distribution to unsecured creditors, the Bankruptcy Court will provide notice to creditors and will allow additional time to file proofs of claim. Although a secured creditor does not need to file a proof of claim in a chapter 7 case to preserve its security interest or lien, there may be other reasons to file a claim. A creditor in a chapter 7 case who has a lien on the debtor's property should consult an attorney for advice.

The primary role of a chapter 7 trustee in an asset case is to liquidate the debtor's nonexempt assets in a manner that maximizes the return to the debtor's unsecured creditors. The trustee accomplishes this by selling the debtor's property if it is free and clear of liens (as long as the property is not exempt) or if it is worth more than any security interest or lien attached to the property and any exemption that the debtor holds in the property. The trustee may also attempt to recover money or property under the trustee's "avoiding powers." The trustee's avoiding powers include the power to: set aside preferential transfers made to creditors within 90 days before the petition; undo security interests and other prepetition transfers of property that were not properly perfected under nonbankruptcy law at the time of the petition; and pursue nonbankruptcy claims such as fraudulent conveyance and bulk transfer remedies available under state law. In addition, if the debtor is a business, the bankruptcy court may authorize the trustee to operate the business for a limited period of time, if such operation will benefit creditors and enhance the liquidation of the estate. 11 U.S.C. § 721.

While most Chapter 7 bankruptcies are quick, some more complicated Chapter 7 bankruptcies can drag on for many years even decades. If it is an individual who has filed chapter 7, the individual may be dismissed quickly leaving the assets with the trustee to liquidate in a manner that the trustee believes will bring the greatest value to the estate.

How Long will the COMMONWEALTH OF PUERTO RICO bankruptcy last?

Each bankruptcy is a unique set of facts, issues, and parties that makes it difficult to predict exactly how long a bankruptcy will last. There are some time limits that courts may or may not enforce that are intended to make sure that a bankruptcy case does not linger. The individual complexites of the COMMONWEALTH OF PUERTO RICO bankruptcy will determine how long it will last. According to our bankruptcy database, since 2012 the average time for a bankruptcy filing from inception to closure is 322.76 days. Averages for each chapter of bankruptcy are:

  • Average duration of Chapter 7 bankruptcy cases: 280.42 days
  • Average duration of Chapter 9 bankruptcy cases: 569.42 days
  • Average duration of Chapter 11 bankruptcy cases: 550.42 days
  • Average duration of Chapter 12 bankruptcy cases: 792.72 days
  • Average duration of Chapter 13 bankruptcy cases: 874.69 days
  • Average duration of Chapter 15 bankruptcy cases: 780.71 days

What Should Bankruptcy Creditors Do?

Bankruptcies can be very daunting for creditor that have not gone through the process before. The most importance advice that we can offer is to stay up date. Bankruptcies occur over time and there may be long gaps of time where nothing seems to be happening and then there is a sudden flurry of activity. If you are listed as a creditor in a bankruptcy case, you will receive occasional notices from the court. Unless it is a large bankruptcy where a bankruptcy claims administrator has been hired to manage communications with creditors, notices from the court will most likely be handled through the mail. This means that you may not know about something happening in bankruptcy case until fairly late. You can get this information by obtaining a PACER login, finding the right court, logging into the court, entering the case number, pulling the docket report, and reading through it. But remember, you will be charged for doing this and you will have to remember to go through this laborious process again every few days. (Or you can just sign up with BankruptcyObserver and let us keep you up to date.)

Other suggestions for creditors:

  • Know what type of bankruptcy has been filed. Bankruptcies are not all the same. Just because a company has filed bankruptcy does not mean that all hope is lost. In chapter 11 bankruptcies, the debtor will try to reorganize to be able to continue operating. Chapter 7 bankruptcies are where companies or individuals are simply liquidating their assets. In these cases, the a trustee will likely be appointed that will assess the assets in the estate and contact the creditors.
  • File a claim. Depending upon the bankruptcy chapter, you may not be able to file a claim immediately. Check on this and make sure that you file a claim as soon as you can.
  • Check whether it is likely to be a payment to unsecured creditors. Item number 13 on the debtor's bankruptcy petition is a checkbox where the debtor is required to indicate whether funds will be available for distribtution to unsecured creditors or whether after any administrative expenses are paid, no funds will be available for distribution to unsecured creditors.

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