Commonwealth of Puerto Rico – Lehman Brothers Objects to Disclosure Statement, Citing Inadequate Information

November 13, 2018 – Lehman Brothers Holdings filed an objection [Docket No. 4213] to the Title III Plan of Adjustment of the Debts of Puerto Rico Sales Tax Financing Corporation. The objection explains, “While the Disclosure Statement is extensive as befits the nature of this case, it nevertheless fails to provide adequate information for creditors to make an informed decision regarding the Debtor’s Title III Plan of Adjustment of the Debts of Puerto Rico Sales Tax Financing Corporation….The Disclosure Statement fails to address in any manner that the Debtor cannot redeem, defease, refund or purchase certain of its existing senior bonds as contemplated under the Plan without satisfying a contractual obligation to Lehman.…In order to pass muster, the Disclosure Statement must not only disclose this obligation to Lehman but confirm how it will be paid…Lehman submits that the Disclosure Statement is deficient because, among other reasons…it fails to provide any detail regarding causes of action the Debtor may have that could be another source of recovery for non-bondholder related claims.”