Daily Archives: February 7, 2022

Last month, a federal judge approved the largest debt restructuring plan ever reported in the United States, paving the way to end Puerto Rico's long and painful bankruptcy process.

The plan -- capping a years-long debate between creditors and local and federal officials --- reduces the largest part of the islands largest outstanding debt portion from $33 billion to about $7 billion. Debt originally amounted to $70 billion plus $50 billion in pension obligations.

Puerto Ricos Electric Power Authority separately owes more than $9 billion. The financial oversight board responsible for extricating the island from bankruptcy expects to have a plan for that debt later this year.

Last week, the longtime executive director of the board, Natalie Jaresko, who helped negotiate the plan, announced her resignation effective in April. She and the board have faced criticism for the length of time it took to negotiate the plan as well as austerity measures imposed in the meantime, but they lauded the deal as a historic step for Puerto Rico's future.

Although the plan is a step forward in moving Puerto Rico out of crushing debt, experts remain concerned about the islands economic future.

According to the Center for the New Economys policy director Sergio Marxuach, the plan is based on long term projections for the economy, which are very uncertain.

Economists are expecting an influx of money to reach Puerto Rico in the next five years linked to the recovery efforts from both hurricanes and the earthquakes. But the rest of the economy remains uncertain.

People protest the Debt Adjustment Plan outside the federal court where it is being considered by bankruptcy Judge Laura Taylor Swain in San Juan, Puerto Rico, Nov. 8, 2021.

I want to believe that elected officials in Puerto Rico and in the U.S. are concerned that Puerto Rico needs to grow after the reconstruction ends, economist and professor at the University of Puerto Rico, Jos Caraballo-Cueto told ABC News.

The economy is not going to grow by itself, and it's not going to grow jobs based on more fiscal stimulus either by receiving new federal funds or rather by issuing new debt, Caraballo-Cueto added.

How Puerto Ricos economy faltered?

Decades of mismanagement and excessive debt led Puerto Rico to file for bankruptcy in 2016 under the Puerto Rico Oversight Management Economic Stability Act (PROMESA). The law, signed by former President Barack Obama, gave the island an alternative because, as a territory, it could not file under Chapter 9, the traditional avenue for financially distressed municipalities.

The year before, the island failed to comply with payments on $70 billion in public debt and more than $50 billion in pension obligations. The pension portion of the debt will not be restructured which means every pensioner is supposed to received what they were promised.

Puerto Ricos debt is unpayable, said former Gov. Alejandro Garca-Padilla in 2015. Under his administration and President Obamas last term, PROMESA was imposed, including its Financial Oversight and Management Board.

The board, made up of seven members, is in charge of handling the islands finances and has received criticism from residents, local and federal officials amid the delay in reaching a consensus that would lead Puerto Rico out of the bankruptcy.

In a statement announcing her departure, effective in April, Jaresko touted her achievements during her tenure.

I am leaving the Oversight Board at a time of recovery and stability. I am proud of what we have achieved, and I am confident that the road that led us to this milestone will take Puerto Rico further to growth and prosperity, Jaresko said in a statement.

The board's chair, David Skeel, lauded her work.

I am saddened by her personal decision to step back but I also understand her desire for a change after five years of rewarding but relentless and difficult work to help Puerto Rico recover from its fiscal and economic crisis," Skeel said.

Jaresko acknowledged, however, "these have been complex years, and the painful natural disasters, political turmoil, and the pandemic added to the hurdles we needed to overcome,"

Months after the board started working on the island, Puerto Rico was slammed by Hurricane Irma and Mara causing over $90 billion in losses, according to the local government.

Three years later the island got hit again with thousands of earthquakes and the ongoing pandemic debilitating Puerto Ricos economy even more.

Natalie Jaresko the executive director of the board is speaks on a public hearing on May 27,2021 at San Juan, Puerto Rico.

Whats next for the island?

Puerto Rico will have to start paying the debt with the hope that the islands economy will grow independently from the federal aid that is expected to arrive.

Its a leap of faith, Marxuach, from the Center for the New Economy, told ABC News.

It's a big concern for us, that once this money dries up, we really don't have a, you know, strategic vision, as you know, for growing the economy. And we may go back into a recession, Marxuach added.

Although many experts are aware the agreement is not perfect and risky, they considered it a step forward in getting Puerto Rico out of the financial crisis.

Under the approved plan, pension obligations were protected, securing many retirees that were fearful of their economic stability.

I think the positive side of this restructuring was that pensions were protected and I think that's a big win for the civil society of Puerto Rico, Caraballo-Cueto told ABC News.

Although he is in favor of fully protecting pensions, Marxuach is concerned what protecting pensions means for the ability to invest in younger generations.

Protecting the pensions was a good thing but I think about the amount we're going to be paying on pensions every year going forward, which is about $2 billion and think then think about the amount we're going to be putting from the general fund into the University of Puerto Rico, which is only $500 million, Marxuach says.

As Puerto Rico heads into a new phase of the bankruptcy process, experts are warning that this is just the beginning.

We're turning the corner and things are starting to look better, but we still have a lot of work to do, Marxuach said.

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Puerto Rico may be nearing the end of bankruptcy. What does this mean? - ABC News

Australia: One-year bankruptcy is back on the table

06 February 2022

Worrells Solvency & Forensic Accountants

To print this article, all you need is to be registered or login on Mondaq.com.

You may recall that way back in October 2017 the governmentintroduced the Bankruptcy Amendment (Enterprise Incentives)Bill to amend the Bankruptcy Act 1966 toreduce the automatic bankruptcy period from three years to oneyear. The Bill lapsed in 2019 but was still floating around thehalls of government and the Attorney-General has put it back on thetable by seeking submissions to reform the Bankruptcy Act inrelation to:

However, it is not all plain sailing for those facingbankruptcy! The government is particularly interested in gettingstakeholders thoughts on excluding bankrupts from being eligiblefor a one-year bankruptcy where in the last 10 years they have:

Been bankrupt

This is proposed to be staged such that if the reform becomeseffective and you've already had a one-year bankruptcy in a10-year period, then any future bankruptcy will be two years. Ifyou go bankrupt again in the next 10 years, then it will be threeyears. After that (hopefully very few get to that!) it resets toone year.

Been banned as a director

No staging here; the bankruptcy is automatically three years.However, those automatically banned as a result of going bankruptget the one, two, or three years outlined above.

Had a bankruptcy extended through an objection todischarge

So, if you had been bankrupt in the last 10 years and thebankruptcy trustee objected to your automatic discharge frombankruptcy, then you're not entitled to the one-yearbankruptcy.

Have been convicted of certain offences

If you had been convicted of a Bankruptcy Act or fraud-relatedoffence you are straight to the maximum three years.

Promoting debt agreements & targeting untrustworthyadvisors

The government is concerned about the reduction in Part IX, debtagreements use. National volumes reduced from 11,549 in the 2018-19period, to 3,731 in the 2020-21 period. No doubt some of thereduction has been as a result of the government's and majorlender's financial responses to the pandemic. However, sincethe numbers have not materially increased, consideration is beinggiven to:

In an effort to further detect and stamp out pre-insolvencyadvice by untrustworthy advisors the Attorney-General is seekingstakeholder views on expanding the Bankruptcy Act to:

Details of the consultation can be found here, with submissions closing on 25 February2022.

The content of this article is intended to provide a generalguide to the subject matter. Specialist advice should be soughtabout your specific circumstances.

POPULAR ARTICLES ON: Insolvency/Bankruptcy/Re-structuring from Australia

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One-year bankruptcy is back on the table - Insolvency/Bankruptcy/Re-structuring - Australia - Mondaq News Alerts

Although Andrew Garfield is a successful actor now, when he was growing up, his family experienced some financial hardships. However, looking back, Garfield did not see the situation as fully negative. He once shared some important life lessons that came out of the time his family went through bankruptcy and why it was the best thing to happen to them.

Garfield was born in Los Angeles to an American father, Richard, and an English mother, Lynn. When Garfield was 3 years old, his family decided to move to Surrey, England, where he was eventually raised.

Im very lucky because it means I dont identify with any place, Garfield once said (via The Telegraph). It means Ive had my fathers accent and value system in one ear and my mothers accent and value system in the other, and its a wonderful balance.

Garfield has an older brother named Ben, who now works as a doctor.

RELATED: Andrew Garfields Girlfriend: Is the Spider-Man Star Currently Dating Anyone?

When Garfield was 12 or 13, his father when bankrupt. The actor told Bustle in November 2021 that this experience was the best thing to happen to our family.

He realized all the people he loved were still there, Garfield explained. His wife, his kids, his friends, himself. He was brought to his knees and totally humbled, and then he started doing more of what he was called to do.

Garfields father ended up becoming a swimming coach at a local club. And this ordeal taught Garfield an important life lesson.

My main goal in this life is to cultivate and rub up against the people, the places, the projects, the practices thats alliteration there with the ps that make me feel most alive, Garfield said.

Garfield has built a successful career for himself in the entertainment industry.

He started getting interested in acting at a very young age, and he even studied at the Central School of Speech and Drama in London. After graduating in 2004, Garfield landed roles in shows like Doctor Who and movies like Lions for Lambs (2007) and The Other Boleyn Girl (2008).

Garfield gained more attention in the 2010s, starting with his role as Eduardo Saverin in the film The Social Network. Then, his international breakthrough came in 2012 when he starred as Peter Parker/Spider-Man in the film The Amazing Spider-Man. He reprised the role again in the sequel, The Amazing Spider-Man 2, and made a special appearance in the 2021 movie Spider-Man: No Way Home.

In addition to his work on the big screen, Garfield has also notably starred in stage productions in both the U.K. and the U.S. For example, he has appeared in plays such as Death of a Salesman and Angels in America. He has even won a Tony Award for his work in the latter.

According to Celebrity Net Worth, Garfield is worth around $16 million.

RELATED: Andrew Garfield Addresses Fans Desire for Him to Star in New Spider-Man Movies, Its Hard to Want More Right Now

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Andrew Garfield Once Explained Why Bankruptcy Was the 'Best Thing' to Happen to His Family - Showbiz Cheat Sheet

NOVOSIBIRSK, 7 February. /Then24/. The Novosibirsk Arbitration Court on Monday introduced a monitoring procedure in relation to the regional operator for the treatment of MSW Ecology-Novosibirsk LLC, which filed a lawsuit for self-bankruptcy due to a debt of 1.8 billion rubles, follows from the file of arbitration cases.

In early December, the companys management published a message about their intention to file for bankruptcy of their company due to debts to contractors. On December 21, the Arbitration Court of the Novosibirsk Region registered the companys claim for self-bankruptcy with a debt of over 1.8 billion rubles.

Information about the adopted judicial act the introduction of surveillance, the message says.

Since the beginning of 2019, the Novosibirsk Region has switched to a new municipal solid waste (MSW) management system. Ecology-Novosibirsk became the regional operator of MSW. In November 2019, the ex-head of the Ministry of Natural Resources of the Russian Federation Dmitry Kobylkin named 16 regions of the country where the problem of MSW removal is most acute. Novosibirsk region was among such regions. One of the main problems was the debt that the regional operator had accumulated to carriers and landfills at that time about 700 million rubles.

In December 2019, due to the current situation, several carriers announced their withdrawal from the market. In mid-April 2020, the relevant committee of the Legislative Assembly of the Novosibirsk Region approved a bill allowing the regional government to terminate the contract with the regional operator unilaterally. To pay off the debt to municipal enterprises, the reoperator offered to conclude tripartite agreements, the regions leadership is considering several options for resolving the debt, including termination of the contract with the reoperator and debt restructuring within two years.

Source

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Novosibirsk court began bankruptcy proceedings for an operator for the treatment of MSW - Then24

A piece of paperwork has cost an Invercargill accountant who was adjudged bankrupt his home.

Darryl Robert Hewitson started his accountancy business in Invercargill in 1997. He later became ill with pulmonary sarcoidosis, a respiratory complaint, which adversely affected his ability to work.

In a judgement released by Justice Rachel Dunningham yesterday, it says in 2009 Hewitson was served with proceedings by some of his clients.

Hewitson owed a total of $412,038.53 to six claimants including costs and disbursements.

The outstanding amount still owed to creditors is $337,123.28 plus the assignee's unrecovered time costs of $15,987.42 and outstanding disbursements of $19,413.12.

On November 18, 2009, Hewitson was adjudicated bankrupt in the High Court at Invercargill.

An insolvency officer wrote to him the following day advising him of his obligations including the need to file a Statement of Affairs within 10 working days.

Despite repeated requests and the officer reminding Hewitson his three-year bankruptcy period would not commence until the statement was received, he failed to file it.

In April 2010, Hewitson's mother bought his Regent St property for $180,000 and in May of the same year he said he sent the Statement of Affairs to the assignee. However, it was never received by the assignee's office.

Hewitson was gifted $250,000 from his father in 2014 and he used $165,000 of it to buy his former home, believing he was already discharged from bankruptcy.

In March 2018, Land Information New Zealand notified Hewitson a caveat had been lodged against his property by the assignee.

"When he contacted the office of the assignee, he was told that they had not received his Statement of Affairs and he remained an undischarged bankrupt."

It was not until April 2021, three years after he completed another statement, he was automatically discharged from bankruptcy.

The High Court appeal heard in the Invercargill District Court on December 13 wasfor Hewitson to seek judicial review to stop the sale of his property citing the assignee failed to have regard for all relevant circumstances including the conditions under which he reacquired the property and the changed circumstances of the creditors.

Hewitson's review of his creditors showed some appeared not to be trading, or were in the process of being removed, one business owner had died, and after a conversation he had with one in September 2021, he did not believe the man had any interest in recovering monies.

Justice Dunningham said he had considered Hewitson's interest in remaining in his home due to his ill health and the misunderstanding he believed he was already discharged.

"Notwithstanding this he is in possession of a substantial after-acquired asset while his creditors have only received 25c in the dollar in payment of their claims.

"In all fairness I believe we should be proceeding to sell the property again."

Justice Dunningham dismissed Hewitson's application.

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Bankruptcy confusion leads to loss of home - New Zealand Herald