The primary issue that has always interested me is why the Puerto Rico OBoard has never addressed the issue of Pillar 2 #muniland.
Promesa was written before (2016) Pillar 2 was made a global accord (2022) & nothing in Promesa would bar the OBoard from requiring the PR govt to collrevenues (Promesa 48 USC 2148 language below).
This would likely be billions of additional tax revenues per year which could fund free electricity for most of the island for example.
Instead of collecting the "top up" tax from some of the world's most profitable corporations the PR govt & OBoard insist that Congress spend more money increasing Medicaid payments to the island.
If I ever write a book on PR one of my main issues will be why the OBoard made no effort to require collection of more revenues under Pillar 2. What say you @daskeel?
A primary subject of investigation would be the close nexus between the OBoard's primary advisors McKinsey and pharma companies Amgen, J&J, Lilly & Baxter operating on the island (see below).
Btw this is definitely a topic that the White House should address when it hauls the dismissed PR OBoard members in for their examination.
Gemini AI analysis of the nexus btw McKinsey & the pharma companies share.google/aimode/8JwAOL0…
Promesa was written before (2016) Pillar 2 was made a global accord (2022) & nothing in Promesa would bar the OBoard from requiring the PR govt to collrevenues (Promesa 48 USC 2148 language below).
This would likely be billions of additional tax revenues per year which could fund free electricity for most of the island for example.
Instead of collecting the "top up" tax from some of the world's most profitable corporations the PR govt & OBoard insist that Congress spend more money increasing Medicaid payments to the island.
If I ever write a book on PR one of my main issues will be why the OBoard made no effort to require collection of more revenues under Pillar 2. What say you @daskeel?
A primary subject of investigation would be the close nexus between the OBoard's primary advisors McKinsey and pharma companies Amgen, J&J, Lilly & Baxter operating on the island (see below).
Btw this is definitely a topic that the White House should address when it hauls the dismissed PR OBoard members in for their examination.
Gemini AI analysis of the nexus btw McKinsey & the pharma companies share.google/aimode/8JwAOL0…
4
5
22
Puerto Rico has portrayed itself as a poor struggling Caribbean island while giving $100s of billions in corporate tax giveaways to global pharmaceutical firms over multiple decades & then declaring bankruptcy #muniland.
"Estimates of $100 Billion in Local Tax Breaks: Between 2017ican government distributed roughly $100.5 billion in tax breaks to its manufacturing sector—of which the pharmaceutical industry is the dominant cornerstone [source: see below from Gemini]."
Pillar Two is an international tax framework established in 2022 by the OECD/G20 that sets a 15% global minimum effective tax rate for large multinational enterprises.
Key Details:
Target Audience: MNE groups with consolidated annual revenues of €750 million or more in at least two of the previous four fiscal years.
Core Goal: To stop "base erosion and profit shifting" (BEPS), where companies move profits to low-tax havens to lower their overall tax burden.
Minimum Rate: A 15% effective tax rate (ETR) calculated on a country-by-country basis. If a jurisdiction taxes a company below 15%, a top-up tax applies.
Main Enforcement:
Mechanisms: Pillar Two uses three interlocking rules:
+Qualified Domestic Minimum Top-up Tax (QDMTT): Allows the country where the low-taxed profits are earned to collect the top-up tax first.
+Income Inclusion Rule (IIR): Imposes a top-up tax at the parent company level if a foreign subsidiary's income is taxed below 15%.
+Undertaxed Profits Rule (UTPR): Acts as a backstop; if the parent company's jurisdiction doesn't tax it at 15%, other participating countries can deny deductions or adjust taxes.
America has not formally adopted Pillar 2 [which was a major political loss for Janet Yellen] and has left it to PR to decide how to implement the global accord.
In mid Oct the PR Chamber of Commerce asked the PR Legislature to pass a workaround to Pillar 2 global tax framework which would collect the "top up" tax locally from the global pharmaceutical companies, deposit the tax revenues in a separate PR fund and essentially recycle the tax revenues back to the corporations who paid the tax through cash grants.
This mechanism, of course, would violate the global accord and the nations where the corporations are headquartered could impose the "top up" tax themselves and keep the revenues.
Gemini's AI analysis of much annual profit multinationals are offshoring to PR share.google/aimode/GlqIUh2…
@TaxFoundation analysis taxfoundation.org/research/all/f…
"Estimates of $100 Billion in Local Tax Breaks: Between 2017ican government distributed roughly $100.5 billion in tax breaks to its manufacturing sector—of which the pharmaceutical industry is the dominant cornerstone [source: see below from Gemini]."
Pillar Two is an international tax framework established in 2022 by the OECD/G20 that sets a 15% global minimum effective tax rate for large multinational enterprises.
Key Details:
Target Audience: MNE groups with consolidated annual revenues of €750 million or more in at least two of the previous four fiscal years.
Core Goal: To stop "base erosion and profit shifting" (BEPS), where companies move profits to low-tax havens to lower their overall tax burden.
Minimum Rate: A 15% effective tax rate (ETR) calculated on a country-by-country basis. If a jurisdiction taxes a company below 15%, a top-up tax applies.
Main Enforcement:
Mechanisms: Pillar Two uses three interlocking rules:
+Qualified Domestic Minimum Top-up Tax (QDMTT): Allows the country where the low-taxed profits are earned to collect the top-up tax first.
+Income Inclusion Rule (IIR): Imposes a top-up tax at the parent company level if a foreign subsidiary's income is taxed below 15%.
+Undertaxed Profits Rule (UTPR): Acts as a backstop; if the parent company's jurisdiction doesn't tax it at 15%, other participating countries can deny deductions or adjust taxes.
America has not formally adopted Pillar 2 [which was a major political loss for Janet Yellen] and has left it to PR to decide how to implement the global accord.
In mid Oct the PR Chamber of Commerce asked the PR Legislature to pass a workaround to Pillar 2 global tax framework which would collect the "top up" tax locally from the global pharmaceutical companies, deposit the tax revenues in a separate PR fund and essentially recycle the tax revenues back to the corporations who paid the tax through cash grants.
This mechanism, of course, would violate the global accord and the nations where the corporations are headquartered could impose the "top up" tax themselves and keep the revenues.
Gemini's AI analysis of much annual profit multinationals are offshoring to PR share.google/aimode/GlqIUh2…
@TaxFoundation analysis taxfoundation.org/research/all/f…
13
34
130
AI used to validate the earliest written record of the divinity of Jesus Christ. We're on the cusp of a new renaissance.
share.google/aimode/JdBqN56…
share.google/aimode/JdBqN56…
1
1
19
Positive development as the Title 3 court orders the parties (ie OBoard) to figure how oral arguments can happen when they've forced heavy redactions in the Prepa accounting claim. Is the OBoard is afraid their args cant stand the harsh sunlight of public disclosure? #muniland
M
M
0
1
8
Puerto Rico's fiscal agency, AFFAF, argues in the Prepa accounting claim litigation that allegedly bondholders must have known that "month operating reports" (MORs) were inaccurate and supposedly there were no net revenues #muniland.
As the leaders of Prepa testified to the e on Economic Growth in Puerto Rico in 2016 Prepa had had a "liquidity" crisis but had improved collections, reduced headcount, gotten control of capex & opex to support the reduced debt service payments negotiated in 2014/15. Prepa had developed a $2.4 billion capex plan to upgrade the utility's infrastructure & proposed a small surcharge (1.3 cents kwh) to help cover increased service costs since the base rate had not been increased since 1989.
What is remarkable is that there was a substantive plan in place in 2016 to stabilize & upgrade Prepa but once the OBoard arrived everything went off the rails post hurricanes and seemingly has never been gotten back on track.
Notably the PR govt & OBoard continued to do debt restructuring deals with bondholders that assumed net revenues through 2022 while simultanously filing an adversary to try & nullify the Prepa lien (#319-2019).
Left below AFFAF objection to Prepa bondholders motion for summary judgement accounting claim adversary, Oct 27, 2026 drive.google.com/file/d/10I769c…
Right below written testimony of Javier Quintana Méndez Executive Director Puerto Rico Electric Power Authority and Lisa Donahue Chief Restructuring Officer Puerto Rico Electric Power Authority to the Congressional Task force on Economic Growth in Puerto Rico, Sept 2, 2016 finance.senate.gov/wp-content/upl…
As the leaders of Prepa testified to the e on Economic Growth in Puerto Rico in 2016 Prepa had had a "liquidity" crisis but had improved collections, reduced headcount, gotten control of capex & opex to support the reduced debt service payments negotiated in 2014/15. Prepa had developed a $2.4 billion capex plan to upgrade the utility's infrastructure & proposed a small surcharge (1.3 cents kwh) to help cover increased service costs since the base rate had not been increased since 1989.
What is remarkable is that there was a substantive plan in place in 2016 to stabilize & upgrade Prepa but once the OBoard arrived everything went off the rails post hurricanes and seemingly has never been gotten back on track.
Notably the PR govt & OBoard continued to do debt restructuring deals with bondholders that assumed net revenues through 2022 while simultanously filing an adversary to try & nullify the Prepa lien (#319-2019).
Left below AFFAF objection to Prepa bondholders motion for summary judgement accounting claim adversary, Oct 27, 2026 drive.google.com/file/d/10I769c…
Right below written testimony of Javier Quintana Méndez Executive Director Puerto Rico Electric Power Authority and Lisa Donahue Chief Restructuring Officer Puerto Rico Electric Power Authority to the Congressional Task force on Economic Growth in Puerto Rico, Sept 2, 2016 finance.senate.gov/wp-content/upl…
0
1
13
Prepa bondholders moving to exclude the reports/testimony of the UCC's expert, Julia Frayer, in the accounting claim litigation. OBoard has once again forced redactions but it appears that Frayer didn't use much/any data to draw her conclusions #muniland.
Bondholders highlight r utility hearing, Wabash Valley Power Association, where she said the proponent didn't provide sufficient details to justify the "reasonableness" of the proposed capex.
Note prior to the March, 2024 Prepa confirmation hearings Judge Swain denied bondholders efforts to exclude OBoard's experts including McKinsey's Ojas Shah who didn't read the proposed plan of adjustment or disclosure statement prior to opining on the "best interests test".
Prepa bondholders motion to exclude Frayer's testimony/reports drive.google.com/file/d/19t33gl…
Bondholders highlight r utility hearing, Wabash Valley Power Association, where she said the proponent didn't provide sufficient details to justify the "reasonableness" of the proposed capex.
Note prior to the March, 2024 Prepa confirmation hearings Judge Swain denied bondholders efforts to exclude OBoard's experts including McKinsey's Ojas Shah who didn't read the proposed plan of adjustment or disclosure statement prior to opining on the "best interests test".
Prepa bondholders motion to exclude Frayer's testimony/reports drive.google.com/file/d/19t33gl…
0
2
12
Here we go again -- the PR OBoard has forced massive redactions in Prepa bondholders motion to exclude the testimony of OBoard expert David Daly. Why is the OBoard so afraid of the facts being made public? #muniland
Prepa bondholders motion to exclude report/testimony of David /t.co/gWUeQ2d3U6
Prepa bondholders motion to exclude report/testimony of David /t.co/gWUeQ2d3U6
0
3
11
Prepa bondholders motion to exclude the report/testimony of OBoard's expert David Plastino because he just ran some numbers based on a litigation strategy cooked up by the OBoard #muniland.
"Whether an expert developed his opinion “naturally and directly out of research [he has] f the litigation,” or instead “developed [it] expressly for purposes of testifying,” is a significant indicator of reliability. Daubert v. Merrell Dow Pharms., Inc., 43 F.3d 1311, 1317 (9th Cir. 1995) (on remand)..."
Pdf pg 19 drive.google.com/file/d/1CX0vt_…
"Whether an expert developed his opinion “naturally and directly out of research [he has] f the litigation,” or instead “developed [it] expressly for purposes of testifying,” is a significant indicator of reliability. Daubert v. Merrell Dow Pharms., Inc., 43 F.3d 1311, 1317 (9th Cir. 1995) (on remand)..."
Pdf pg 19 drive.google.com/file/d/1CX0vt_…
0
2
6
Puerto Rico OBoard expert admits he put every dollar of capex into the opex category in his "net revenue" calculations. That's how the OBoard alleges there is zero collateral for secured bondholders ie things lower in the waterfall are elevated above debt service
#muniland
G
#muniland
G
8
4
27
"Can you identify a single instance in which someone came in and changed the methodology for calculating earnings from what the issuer had represented in connection with the sale of the securities?"
#muniland
Glenn Kurtz of @WhiteCase questioning Puerto Rico OBoard's expert ders are rightly trying to get Plastino's report/testimony thrown out.
I said previously that the Prepa accounting claim litigation had major importance for the muni market but it actually has importance for securities markets in general.
In essence the OBoard is arguing that a bankruptcy court can rewrite the terms that investors purchased securities under by allowing the debtor to cook up a new methodology for calculating present/future earnings (net revenues).
drive.google.com/file/d/1f0zeJL…
#muniland
Glenn Kurtz of @WhiteCase questioning Puerto Rico OBoard's expert ders are rightly trying to get Plastino's report/testimony thrown out.
I said previously that the Prepa accounting claim litigation had major importance for the muni market but it actually has importance for securities markets in general.
In essence the OBoard is arguing that a bankruptcy court can rewrite the terms that investors purchased securities under by allowing the debtor to cook up a new methodology for calculating present/future earnings (net revenues).
drive.google.com/file/d/1f0zeJL…
0
4
13
Prepa mediation teams says no mediation is occurring but asks the court to extend the mediation period to April 30, 2027. That will be the 10th year of the bankruptcy. Will the bankruptcy last 15 years?
#muniland
drive.google.com/file/d/1GqlNiT…
#muniland
drive.google.com/file/d/1GqlNiT…
5
1
9
Puerto Rico OBoard's expert on calculating net revenues available to Prepa bondholders didn't use the terms of the trust indenture or Section 928. Instead he used a methodology set out by the OBoard's counsel but doesn't remember who that was.
#muniland
From Prepa bondholder's estimony of OBoard's "expert" David Plastino. Paul Brachman of @PaulWeissLLP examining.
Pdf page 13/14 drive.google.com/file/d/1f0zeJL…
#muniland
From Prepa bondholder's estimony of OBoard's "expert" David Plastino. Paul Brachman of @PaulWeissLLP examining.
Pdf page 13/14 drive.google.com/file/d/1f0zeJL…
0
1
8
Q: Mr. Daly, do you agree that common utility financing practices for capital investments would typically be financed with long-term debt over time as opposed to directly from rates?
A: You said capital?
Q: Exactly
A: Yeah. It typically is not directly from rates.
#muniland
ibid
A: You said capital?
Q: Exactly
A: Yeah. It typically is not directly from rates.
#muniland
ibid
0
2
8
Some details of Luma's profligate spending are spilling out (even with the OBoard's massive redactions) #muniland.
For example utilities have huge fleets of vehicles & never pay the manufactor's sticker price (MSRP). But according to National's attorney Luma paid sticker for Prepme reason.
Ibid, pdf page 299
#Lumaoutofcontrolspending $PWR
For example utilities have huge fleets of vehicles & never pay the manufactor's sticker price (MSRP). But according to National's attorney Luma paid sticker for Prepme reason.
Ibid, pdf page 299
#Lumaoutofcontrolspending $PWR
1
8
11
A key dispute in the Prepa accounting claim is the basis under which the OBoard massively inflated "necessary maintainance expenses" by transferring what traditionally would be capital expenses to operating expense catagory #muniland.
National's attorney, Weil's Robert ard's expert, David Daly, about analysis done in 2019, 2020, 2021 & 2022, by the global leader in power engineering Sargent & Lundy about Prepa's "necessary maintainance expenses" and we have part of the exchange below.
Although we cant see through the redactions it seems as though Berezin is highlighting that Sargent & Lundy drew a line between "necessary mainaintance expenses" and capital expenses & they were classified separately.
The OBoard & their experts are trying to say all capital projects are "necessary maintainance expenses". This is their primary line of attack in saying that bondholder collateral is zero into perpetuity because any capex spending has to be classified as an operating expense.
Will be interesting to see the deposition once the redactions are removed.
document.epiq11.com/document/getdo…
pdf page 251/252
National's attorney, Weil's Robert ard's expert, David Daly, about analysis done in 2019, 2020, 2021 & 2022, by the global leader in power engineering Sargent & Lundy about Prepa's "necessary maintainance expenses" and we have part of the exchange below.
Although we cant see through the redactions it seems as though Berezin is highlighting that Sargent & Lundy drew a line between "necessary mainaintance expenses" and capital expenses & they were classified separately.
The OBoard & their experts are trying to say all capital projects are "necessary maintainance expenses". This is their primary line of attack in saying that bondholder collateral is zero into perpetuity because any capex spending has to be classified as an operating expense.
Will be interesting to see the deposition once the redactions are removed.
document.epiq11.com/document/getdo…
pdf page 251/252
0
0
10
PR OBoard got a protective order to seal most information in the Prepa accounting claim adversary. As a result expert reports & depositions have been heavily redacted. Common sense says a public utility in bankruptcy shouldnt hide info. AI analyzes the law below #muniland
Of court the OBoard needs to hide the facts because the facts go against them.
Case: 19-00391-LTS Doc#:469-3, 10/28/26 document.epiq11.com/document/getdo…
Of court the OBoard needs to hide the facts because the facts go against them.
Case: 19-00391-LTS Doc#:469-3, 10/28/26 document.epiq11.com/document/getdo…
1
1
16
Be reassured #muniland the case law supports the primacy of the trust indenture in Chapter 9. If Congress wanted a debtor to sit in bankruptcy for nearly a decade and consume bondholder collateral for capex they would have said that.
"There is no indication in either the egislative history for the 1988 Amendments that municipal debtors were to be given the ability through Section 928(b) to significantly restructure the contractual agreements for the lien against special revenues or the distribution of monies to secured creditors. Quite the contrary is the case. The Senate Report makes this clear: The intent of Subsection b is not to the change the priority and intent of the use of special revenues under the terms of the municipal debt financing documents.”
Jefferson Cnty. II, 482 B.R. at 436.
I know I lot of you think the Prepa bankruptcy has obliterated the rule of law but courts eventually get it right.
Prepa bondholders summary judgement response, pg 82 drive.google.com/file/d/1CauYXu…
"There is no indication in either the egislative history for the 1988 Amendments that municipal debtors were to be given the ability through Section 928(b) to significantly restructure the contractual agreements for the lien against special revenues or the distribution of monies to secured creditors. Quite the contrary is the case. The Senate Report makes this clear: The intent of Subsection b is not to the change the priority and intent of the use of special revenues under the terms of the municipal debt financing documents.”
Jefferson Cnty. II, 482 B.R. at 436.
I know I lot of you think the Prepa bankruptcy has obliterated the rule of law but courts eventually get it right.
Prepa bondholders summary judgement response, pg 82 drive.google.com/file/d/1CauYXu…
1
4
15
The Puerto Rico OBoard argues that the only case law related to whether §928 includes capital expenses in the definition of "necessary operating expenses" is irrelevant (JeffCo I, 482 B.R. at 438–39) #muniland.
The OBoard argues that a report read into in the legislative record ess intent in crafting §928 in 1988.
Anyone that has been around Congress knows Members can insert content related to the topic but that does not describe the intent of Congress (often Members insert contrary points of view in the record).
OBoard response Prepa accounting claim, pdf pg 72 drive.google.com/file/d/1D7FRCg…
The OBoard argues that a report read into in the legislative record ess intent in crafting §928 in 1988.
Anyone that has been around Congress knows Members can insert content related to the topic but that does not describe the intent of Congress (often Members insert contrary points of view in the record).
OBoard response Prepa accounting claim, pdf pg 72 drive.google.com/file/d/1D7FRCg…
1
4
13
Take note #muniland as the Puerto Rico OBoard attempts to undermine over half of the municipal bond market (ie ~$2.7 trillion in revenue debt):
"Instead, the [O]Board asserts a sweeping theory: “[a]ny theoretical expense (even if capitalized, extraordinary, or non-recurring) essary operating expense under §928(b)."
The primary argument @proskauer & the Puerto Rico OBoard are making to dispute Prepa bondholders accounting claim is that a debtor can sit in bankruptcy for 9 years & use bondholder collateral for capital expenses or anything else they deem an "operating expense".
The OBoard says accounting standards, @FERC's directives to public utilities on classification of expenses and the decades long course of performance of Prepa are irrelevant.
Instead the OBoard argues Congress wanted the bankrupt debtor to disregard what the bond indenture required for decades and just bring in some so-called "litigation experts" who get to classify expenses however they want.
Prepa bondholders response, pg 78 drive.google.com/file/d/1CauYXu…
"Instead, the [O]Board asserts a sweeping theory: “[a]ny theoretical expense (even if capitalized, extraordinary, or non-recurring) essary operating expense under §928(b)."
The primary argument @proskauer & the Puerto Rico OBoard are making to dispute Prepa bondholders accounting claim is that a debtor can sit in bankruptcy for 9 years & use bondholder collateral for capital expenses or anything else they deem an "operating expense".
The OBoard says accounting standards, @FERC's directives to public utilities on classification of expenses and the decades long course of performance of Prepa are irrelevant.
Instead the OBoard argues Congress wanted the bankrupt debtor to disregard what the bond indenture required for decades and just bring in some so-called "litigation experts" who get to classify expenses however they want.
Prepa bondholders response, pg 78 drive.google.com/file/d/1CauYXu…
1
7
14
Took the day off to see the @TiffanyAndCo collaboration with @crystalbridges. The exhibit paired pieces from the Tiffany archive paired w/ pieces from the museum's collection. Additional focus on American mined gemstones for fine jewelry which Tiffany pioneered.
1
2
9
"Generally any radical transformation of our economy is intertwined with a bubble."
Ken Griffin says AI 'Almost certainly' in a bubble right now.
share.google/Q1l3ohdqK3GuNa…
Ken Griffin says AI 'Almost certainly' in a bubble right now.
share.google/Q1l3ohdqK3GuNa…
0
4
5
1853 - the New York Clearinghouse is founded
Panic of 1857 - a severe financial crisis that began on August 24, 1857, with the collapse of the NY branch of the Ohio Life Insurance and Trust Company. It is widely recognized as the world's first truly global economic crisis, cted markets and the telegraph.
Great timeline of US capital markets by @SIFMA for their 20th anniversary timeline.sifma.org
Panic of 1857 - a severe financial crisis that began on August 24, 1857, with the collapse of the NY branch of the Ohio Life Insurance and Trust Company. It is widely recognized as the world's first truly global economic crisis, cted markets and the telegraph.
Great timeline of US capital markets by @SIFMA for their 20th anniversary timeline.sifma.org
1
4
9
U.S. Attorney’s Office for the District of Puerto Rico Announces Creation of the Interagency Fraud Enforcement Task Force #muniland
justice.gov/usao-pr/pr/us-…
justice.gov/usao-pr/pr/us-…
29
45
178
The greatest question in credit markets now ~~ did the hyperscalers issue too much debt to service or has the ginormous flood of new AI paper caused the selloff?
The FT is featuring a Gartner report that alleges about half the new paper wont be able to make a profit (&/or conc
"Gartner said AI data centre owners would need to generate revenues of $8.5 trillion by the end of 2030 to cover their capital and financing costs and generate healthy returns on those investments. But it forecast that consumer and corporate spending on AI services that would flow to data centre providers would reach “no more than $3.6 trillion”.
via FT: giftarticle.ft.com/giftarticle/ac…
Gartner's doomsday prediction: gartner.com/en/newsroom/pr…
If anyone has a copy of the Gartner report I'd love to see it. Also what are the trading desks saying about the Gartner report?
The FT is featuring a Gartner report that alleges about half the new paper wont be able to make a profit (&/or conc
"Gartner said AI data centre owners would need to generate revenues of $8.5 trillion by the end of 2030 to cover their capital and financing costs and generate healthy returns on those investments. But it forecast that consumer and corporate spending on AI services that would flow to data centre providers would reach “no more than $3.6 trillion”.
via FT: giftarticle.ft.com/giftarticle/ac…
Gartner's doomsday prediction: gartner.com/en/newsroom/pr…
If anyone has a copy of the Gartner report I'd love to see it. Also what are the trading desks saying about the Gartner report?
1
4
4
@PhillyJoeD @daskeel Given your repeated interviews of Skeel not sure how you can claim you didn't choose a side long ago.
1
0
0
So in exercising your "gatekeeper" role you decided that an amended deal that haircut debt 15% over the pre-statute deal was not tenable and it was necessary to litigate instead? You substituted your hatred for bondholders over the will of Congress?
Your hatred has left the most essentialomy locked out of debt markets and relying on two private companies that are ill equipped to manage a utility.
By your own telling the utility has declined (of course that's a function of poorly qualified operators and wasn't caused by bondholders).
You have seriously crippled the economic capacity of the island while fighting silly battles over the meaning of collateral. It's unfortunate how damaging your attempt at "gatekeeping" has turned out.
[Btw 97% of Prepa bondholders are in the coop group. I've heard you in interviews assert that it's a small holdout group that objects to the 5th POA. The entire municipal market objects to the deal.]
Your hatred has left the most essentialomy locked out of debt markets and relying on two private companies that are ill equipped to manage a utility.
By your own telling the utility has declined (of course that's a function of poorly qualified operators and wasn't caused by bondholders).
You have seriously crippled the economic capacity of the island while fighting silly battles over the meaning of collateral. It's unfortunate how damaging your attempt at "gatekeeping" has turned out.
[Btw 97% of Prepa bondholders are in the coop group. I've heard you in interviews assert that it's a small holdout group that objects to the 5th POA. The entire municipal market objects to the deal.]
1
0
1
The 1st Circuit orders National (generally Prepa bondholders) to show cause why their appeal of the Title 3 lift stay order shouldnt be dismissed for lack of jurisdiction (ie denial of lift stay is not a final order) #muniland.
drive.google.com/file/d/1gAN3t0…
drive.google.com/file/d/1gAN3t0…
0
5
13
@daskeel You're making up facts again @daskeel. Here is the letter from the House Chairman concering the pre-statute Prepa deal. I'm not sure why you think some Treasury officials have precedence over a lawmaker. In America administration officials don't write law drive.google.com/file/d/0BwUldN…
0
0
6
You're making up facts again @daskeel. Here is the letter from the House Chairman concering the pre-statute Prepa deal. I'm not sure why you think some Treasury officials have precedence over a lawmaker. In America administration officials don't write law #muniland
drive.google.com/file/d/0BwUldN…
drive.google.com/file/d/0BwUldN…
You're quite wrong about this. Not only was the tentative deal we declined to pursue materially different than the tentative pre-PROMESA deal, but PROMESA (at the insistence of the Treasury) carefully preserved flexibility to decide whether it was in PREPA's interest.
3
5
22
Congress explicitly grandfathered a 2015 deal btw the PR govt & Prepa bondholders into Promesa (2016). Oddly you & several of your fellow board members didn't believe you were bound by law. Instead you litigated for 9 years against bondholders. Your attempt to rewrite history wont succeed.
0
2
11
Congress explicitly grandfathered a 2015 deal btw the Puerto Rico govt & Prepa bondholders into Promesa (2016). Oddly David Skeel & several of his fellow board members didn't believe they were bound by law. Instead they've litigated for 9 years against bondholders #muniland.
The bondholders are the ones who have been dragging out the PREPA bankruptcy by raising every conceivable litigation issue they can dream up.
Simple solution would be for the president to push the bondholders to take the offer @fomb put on the table and end the bankruptcy.
1
10
33
If the dismissed Puerto Rico OBoard members are called to the White House to justify their handling of the electric utility bankruptcy the president's committee should inquire what is going on with @proskauer's billings #muniland.
Proskauer hasnt filed a request for compensation 2025 and that application was for June 1, 2024 - Sept 30, 2024. So the OBoard's main attorneys are 2 years behind on their billing (which seems especially odd for a law firm).
Proskauer's last request for comp basically coincides with when President Trump dismissed 6 members of the OBoard on Aug 5, 2025.
Are the OBoard/Proskauer trying to suppress information related to their gross expenditure on attorneys and advisors?
Recall that the Congressional Budget Office estimated that the entire PR bankruptcy (Commonwealth, Prepa and multiple other public corporations) would cost $370 million and they've already spent +$560 million on the electric utility's attorney & advisors alone.
It obviously would be a huge financial hit for @proskauer if they had to stop litigating PR.
Proskauer-20th-compensation-application-Prepa-summary-sheet-aug-18-2025:
drive.google.com/file/d/1Um6qMw…
Proskauer hasnt filed a request for compensation 2025 and that application was for June 1, 2024 - Sept 30, 2024. So the OBoard's main attorneys are 2 years behind on their billing (which seems especially odd for a law firm).
Proskauer's last request for comp basically coincides with when President Trump dismissed 6 members of the OBoard on Aug 5, 2025.
Are the OBoard/Proskauer trying to suppress information related to their gross expenditure on attorneys and advisors?
Recall that the Congressional Budget Office estimated that the entire PR bankruptcy (Commonwealth, Prepa and multiple other public corporations) would cost $370 million and they've already spent +$560 million on the electric utility's attorney & advisors alone.
It obviously would be a huge financial hit for @proskauer if they had to stop litigating PR.
Proskauer-20th-compensation-application-Prepa-summary-sheet-aug-18-2025:
drive.google.com/file/d/1Um6qMw…
1
8
23
Prepa bondholders call for the removal of Puerto Rico OBoard members over their disastrous "oversight" of the +$5 billion Power Expectations temporary generation contract. 9 years of so-called oversight and they cant execute basic contract review properly #muniland cc lican.
Note the OBoard's local counsel concurrently represented Power Expectations > an unexcusable conflict of interest.
businesswire.com/news/home/2026…
Note the OBoard's local counsel concurrently represented Power Expectations > an unexcusable conflict of interest.
businesswire.com/news/home/2026…
5
17
69
"The world’s largest oil companies are looking past the chaos, destruction and lost production caused by the war in the Middle East as they target greater access to the region’s vast oil and gas reserves, a prize they have pursued for decades."
Oil supermajor's are not fazed by the opposite they are planning to dive in the Middle East head first.
giftarticle.ft.com/giftarticle/ac…
Oil supermajor's are not fazed by the opposite they are planning to dive in the Middle East head first.
giftarticle.ft.com/giftarticle/ac…
0
2
11
In contradiction to the Puerto Rico OBoard's current litigation stance that Prepa can use bondholder collateral on capital expenses their pre adversary fiscal plans said funds for capex would not come from Prepa revenues #muniland.
In their FY2018 fiscal plan (post Hurricane rivate investments would be required to improve the system (page 82 - left below). No mention of using system revenues or bondholder collateral.
In the OBoard's FY2019 fiscal plan they said capex would be funded with "debt" and therefore require a "surcharge" on Prepa's clients if federal funds were not available to fund system improvements (page 118 - right below).
Seems the OBoard took the opposite position on using bondholder collateral before they filed their Prepa lien adversary.
Is their flip-flop really a surprise?
FY2018 Prepa fiscal plan, April 19, 2018, page 82 (left below): drive.google.com/file/d/1FgfYFj…
FY2019 fiscal plan, June 27, 2019, page 118 (right below):
drive.google.com/file/d/18wh7W-…
In their FY2018 fiscal plan (post Hurricane rivate investments would be required to improve the system (page 82 - left below). No mention of using system revenues or bondholder collateral.
In the OBoard's FY2019 fiscal plan they said capex would be funded with "debt" and therefore require a "surcharge" on Prepa's clients if federal funds were not available to fund system improvements (page 118 - right below).
Seems the OBoard took the opposite position on using bondholder collateral before they filed their Prepa lien adversary.
Is their flip-flop really a surprise?
FY2018 Prepa fiscal plan, April 19, 2018, page 82 (left below): drive.google.com/file/d/1FgfYFj…
FY2019 fiscal plan, June 27, 2019, page 118 (right below):
drive.google.com/file/d/18wh7W-…
1
4
12
Meanwhile the Puerto Rico OBoard argues that page 899 of In re Jefferson County, Alabama, 503 B.R. 849 (Bankr. N.D. Ala. 2013) ("JeffCo II") allows them to classify capital expenses as "neccessary operating expenses" and use bondholder collateral #muniland.
Analysis via acted memorandum of law, 19-00391-LTS Doc: 432-1, Sept 26, 2026, page 87
drive.google.com/file/d/1legnRX…
Analysis via acted memorandum of law, 19-00391-LTS Doc: 432-1, Sept 26, 2026, page 87
drive.google.com/file/d/1legnRX…
0
1
5
One of the most curious arguments made by the Puerto Rico OBoard in the Prepa accounting claim litigation is that regardless of what the trust indenture says capital expenses can be paid before debt service under 928.b #muniland.
Meanwhile @GoogleAI weighs in on the priority nue pledge in Jefferson County's sewer bankruptcy vs Prepa:
"The Jefferson County, Alabama sewer system bankruptcy (In re Jefferson County, Alabama, 503 B.R. 849) is the most critical legal precedent cited by PREPA bondholders. It provides the judicial blueprint for how courts handle the calculation of "necessary operating expenses" versus "net revenues" under Section 928(b).
In that case, the bankruptcy court rejected the county’s attempt to use flexible, post-petition accounting shifts to starve bondholders, establishing three strict legal principles that apply directly to PREPA.
1. The Primacy of the Indenture over Post-Petition Accounting
Just like the FOMB, Jefferson County argued that it had broad discretion under Section 928(b) to decide what constituted an operating expense to keep the sewer system safe and compliant with environmental regulations.
The court flatly rejected this, ruling that Section 928(b) does not give a debtor a blank check to redefine accounting terms. The court held that the definition of what is an operating expense must be strictly governed by the pre-petition Trust Indenture (the contract). If an expense did not qualify as a routine operational cost under the contract before bankruptcy, the debtor cannot retroactively label it "necessary" under Section 928(b) to zero out bondholder net revenues. [1]
2. The Capital Expenditure vs. Operating Expense Distinction
The core of the JeffCo II ruling focused on the exact accounting treatment of infrastructure upgrades. Jefferson County had lumped major sewer line rehabilitations and system overhauls into "operating expenses" because they were legally required by a federal environmental consent decree. [1]
The court drew a sharp, bright line based on GAAP and the bond contract: [1]
Operating Expenses: Limited strictly to regular, recurring costs required to keep the system running daily (e.g., utility bills, chemicals, routine maintenance salaries).
Capital Expenditures: Major structural overhauls that extend the life of the system must be capitalized.
The Ruling: Even if a capital repair is "necessary" to comply with the law, it cannot be used to deplete the net revenue pool belonging to bondholders. This is exactly what PREPA bondholders argue regarding the billions FOMB spent on grid reconstruction. [1]
3. Subsidies Cannot Deduct Net Revenues
Jefferson County attempted to provide free or heavily subsidized sewer services to certain low-income or municipal entities, treating the lost revenue as an unavoidable cost of operating the system in that community.
The court ruled that uncollected revenues or political subsidies cannot be used to artificially depress "Net Revenues" owed to creditors. The utility must account for what it should have collected under its rate covenants, rather than using political exemptions to erase the bondholders' collateral."
Meanwhile @GoogleAI weighs in on the priority nue pledge in Jefferson County's sewer bankruptcy vs Prepa:
"The Jefferson County, Alabama sewer system bankruptcy (In re Jefferson County, Alabama, 503 B.R. 849) is the most critical legal precedent cited by PREPA bondholders. It provides the judicial blueprint for how courts handle the calculation of "necessary operating expenses" versus "net revenues" under Section 928(b).
In that case, the bankruptcy court rejected the county’s attempt to use flexible, post-petition accounting shifts to starve bondholders, establishing three strict legal principles that apply directly to PREPA.
1. The Primacy of the Indenture over Post-Petition Accounting
Just like the FOMB, Jefferson County argued that it had broad discretion under Section 928(b) to decide what constituted an operating expense to keep the sewer system safe and compliant with environmental regulations.
The court flatly rejected this, ruling that Section 928(b) does not give a debtor a blank check to redefine accounting terms. The court held that the definition of what is an operating expense must be strictly governed by the pre-petition Trust Indenture (the contract). If an expense did not qualify as a routine operational cost under the contract before bankruptcy, the debtor cannot retroactively label it "necessary" under Section 928(b) to zero out bondholder net revenues. [1]
2. The Capital Expenditure vs. Operating Expense Distinction
The core of the JeffCo II ruling focused on the exact accounting treatment of infrastructure upgrades. Jefferson County had lumped major sewer line rehabilitations and system overhauls into "operating expenses" because they were legally required by a federal environmental consent decree. [1]
The court drew a sharp, bright line based on GAAP and the bond contract: [1]
Operating Expenses: Limited strictly to regular, recurring costs required to keep the system running daily (e.g., utility bills, chemicals, routine maintenance salaries).
Capital Expenditures: Major structural overhauls that extend the life of the system must be capitalized.
The Ruling: Even if a capital repair is "necessary" to comply with the law, it cannot be used to deplete the net revenue pool belonging to bondholders. This is exactly what PREPA bondholders argue regarding the billions FOMB spent on grid reconstruction. [1]
3. Subsidies Cannot Deduct Net Revenues
Jefferson County attempted to provide free or heavily subsidized sewer services to certain low-income or municipal entities, treating the lost revenue as an unavoidable cost of operating the system in that community.
The court ruled that uncollected revenues or political subsidies cannot be used to artificially depress "Net Revenues" owed to creditors. The utility must account for what it should have collected under its rate covenants, rather than using political exemptions to erase the bondholders' collateral."
1
2
5
I've been looking at the Puerto Rico OBoard's budgets & fiscal plan for Prepa mainly because the OBoard sought a protective order in the accounting claim adversary & all the financial data bondholders are using to make their case in litigation has been redacted #muniland.
Does anyone enancial data for a PUBLIC utility is considered "trade secrets" or proprietary and need to be hidden?
The last audited financials the utility published are for fiscal year 2023 and we're now in fiscal year 2027.
Lack of financial data is especially odd given the OBoard has cumulatively spent over $583 million on their own advisors & attorneys for the utility and yet there is nothing current for Prepa.
Also note the massive drop in OBoard's budgeted legal costs from $27.4 million in FY26 to $3.7 million in FY27. The OBoard's Prepa litigation is not down 90% so was this out of fear of President Trump or something else?
Prepa budgets & FPs: drive.google.com/file/d/1rJLyvc…
Does anyone enancial data for a PUBLIC utility is considered "trade secrets" or proprietary and need to be hidden?
The last audited financials the utility published are for fiscal year 2023 and we're now in fiscal year 2027.
Lack of financial data is especially odd given the OBoard has cumulatively spent over $583 million on their own advisors & attorneys for the utility and yet there is nothing current for Prepa.
Also note the massive drop in OBoard's budgeted legal costs from $27.4 million in FY26 to $3.7 million in FY27. The OBoard's Prepa litigation is not down 90% so was this out of fear of President Trump or something else?
Prepa budgets & FPs: drive.google.com/file/d/1rJLyvc…
1
5
17
@WarrenPlatts Have you seen the VT state house in Montpelier? It's almost entirely devoted to those lost in the Civil War.
1
1
1
Puerto Rico OBoard restructuring, legal and advisor fees for the electric utility, Prepa = $583 million FY2019-FY2027 #muniland
Derived from OBoard FY19-FY27 certified Prepa budgets.
Derived from OBoard FY19-FY27 certified Prepa budgets.
6
3
19
The ceiling of the dome of the Reading Room in the @librarycongress > > Human Understanding: A female figure at the peak of the lantern lifting the veil of ignorance, looking toward intellectual progress.
0
1
5
