117 HR 1192 RS: Puerto Rico Recovery Accuracy in Disclosures Act of 2021 U.S. House of Representatives 2021-02-25 text/xml EN Pursuant to Title 17 Section 105 of the United States Code, this file is not subject to copyright protection and is in the public domain.

IICalendar No. 182117th CONGRESS1st SessionH. R. 1192[Report No. 117–48]IN THE SENATE OF THE UNITED STATESFebruary 25, 2021Received; read twice and referred to the Committee on Energy and Natural ResourcesDecember 13, 2021Reported by Mr. Manchin, with an amendmentStrike out all after the enacting clause and insert the part printed in italicAN ACTTo impose requirements on the payment of compensation to professional persons employed in voluntary cases commenced under title III of the Puerto Rico Oversight Management and Economic Stability Act (commonly known as PROMESA).

1.

Short title

This Act may be cited as the Puerto Rico Recovery Accuracy in Disclosures Act of 2021 or PRRADA.

2.

Disclosure by professional persons seeking approval of compensation under section 316 or 317 of PROMESA

(a)

Required disclosure

(1)

In general

In a voluntary case commenced under section 304 of PROMESA (48 U.S.C. 2164), no attorney, accountant, appraiser, auctioneer, agent, consultant, or other professional person may be compensated under section 316 or 317 of that Act (48 U.S.C. 2176, 2177) unless prior to making a request for compensation, the professional person has submitted a verified statement conforming to the disclosure requirements of rule 2014(a) of the Federal Rules of Bankruptcy Procedure setting forth the connection of the professional person with—(A)the debtor;(B)any creditor;(C)any other party in interest, including any attorney or accountant;(D)the Financial Oversight and Management Board established in accordance with section 101 of PROMESA (48 U.S.C. 2121); and(E)any person employed by the Oversight Board described in subparagraph (D).(2)

Other requirements

A professional person that submits a statement under paragraph (1) shall—(A)supplement the statement with any additional relevant information that becomes known to the person; and(B)file annually a notice confirming the accuracy of the statement.(b)

Review

(1)

In general

The United States Trustee shall review each verified statement submitted pursuant to subsection (a) and may file with the court comments on such verified statements before the professionals filing such statements seek compensation under section 316 or 317 of PROMESA (48 U.S.C. 2176, 2177).(2)

Objection

The United States Trustee may object to compensation applications filed under section 316 or 317 of PROMESA (48 U.S.C. 2176, 2177) that fail to satisfy the requirements of subsection (e).(3)

Right to be heard

Each person described in section 1109 of title 11, United States Code, may appear and be heard on any issue in a case under this section.(c)

Jurisdiction

The district courts of the United States shall have jurisdiction of all cases under this section.(d)

Retroactivity

(1)

In general

If a court has entered an order approving compensation under a case commenced under section 304 of PROMESA (48 U.S.C. 2164), each professional person subject to the order shall file a verified statement in accordance with subsection (a) not later than 60 days after the date of enactment of this Act.(2)

No delay

A court may not delay any proceeding in connection with a case commenced under section 304 of PROMESA (48 U.S.C. 2164) pending the filing of a verified statement under paragraph (1).(e)

Limitation on compensation

(1)

In general

In a voluntary case commenced under section 304 of PROMESA (48 U.S.C. 2164), in connection with the review and approval of professional compensation under section 316 or 317 of PROMESA (48 U.S.C. 2176, 2177), the court may deny allowance of compensation for services and reimbursement of expenses, accruing after the date of the enactment of this Act of a professional person if the professional person—(A)has failed to file statements of connections required by subsection (a) or has filed inadequate statements of connections;(B)except as provided in paragraph (3), is on or after the date of enactment of this Act not a disinterested person, as defined in section 101 of title 11, United States Code; or(C)except as provided in paragraph (3), represents, or holds an interest adverse to, the interest of the estate with respect to the matter on which such professional person is employed.(2)

Considerations

In making a determination under paragraph (1), the court may take into consideration whether the services and expenses are in the best interests of creditors and the estate.(3)

Committee professional standards

An attorney or accountant described in section 1103(b) of title 11, United States Code, shall be deemed to have violated paragraph (1) if the attorney or accountant violates section 1103(b) of title 11, United States Code.

1.

Short title

This Act may be cited as the Puerto Rico Recovery Accuracy in Disclosures Act of 2021 or PRRADA.

2.

Disclosure by professional persons seeking approval of compensation under section 316 or 317 of PROMESA

(a)

Definitions

In this section:(1)

List of Material Interested Parties

The term List of Material Interested Parties means the List of Material Interested Parties established under subsection (c)(1).(2)

Oversight Board

The term Oversight Board has the meaning given the term in section 5 of PROMESA (48 U.S.C. 2104).(b)

Required disclosure

(1)

In general

In a case commenced under section 304 of PROMESA (48 U.S.C. 2164), no attorney, accountant, appraiser, auctioneer, agent, or other professional person may be compensated under section 316 or 317 of that Act (48 U.S.C. 2176, 2177) unless prior to making a request for compensation, the professional person has filed with the court a verified statement conforming to the disclosure requirements of rule 2014(a) of the Federal Rules of Bankruptcy Procedure setting forth the connection of the professional person with any entity or person on the List of Material Interested Parties.(2)

Supplement

A professional person that submits a statement under paragraph (1) shall promptly supplement the statement with any additional relevant information that becomes known to the person.(3)

Disclosure

Subject to any other applicable law, rule, or regulation, a professional person that fails to file or update a statement required under paragraph (1) or files a statement that the court determines does not represent a good faith effort to comply with this section shall disclose such failure in any filing required to conform to the disclosure requirements under rule 2014(a) of the Federal Rules of Bankruptcy Procedure.(c)

List of material interested parties

(1)

Preparation

Not later than 30 days after the date of enactment of this Act, the Oversight Board shall establish a List of Material Interested Parties subject to—(A)the approval of the court; and(B)the right of the United States trustee or any party in interest to be heard on the approval.(2)

Inclusions

Except as provided in paragraph (3), the List of Material Interested Parties shall include—(A)the debtor;(B)any creditor;(C)any other party in interest;(D)any attorney or accountant of—(i)the debtor;(ii)any creditor; or(iii)any other party in interest;(E)the United States trustee and any person employed in the office of the United States trustee; and(F)the Oversight Board, including the members, the Executive Director, and the employees of the Oversight Board.(3)

Exclusions

The List of Material Interested Parties may not include any person with a claim, the amount of which is below a threshold dollar amount established by the court that is consistent with the purpose of this Act.(d)

Review

(1)

In general

The United States trustee shall review each verified statement submitted pursuant to subsection (b) and may file with the court comments on such verified statements before the professionals filing such statements seek compensation under section 316 or 317 of PROMESA (48 U.S.C. 2176, 2177).(2)

Objection

The United States trustee may object to applications filed under section 316 or 317 of PROMESA (48 U.S.C. 2176, 2177) that fail to satisfy the requirements of subsection (b).(e)

Limitation on compensation

In a case commenced under section 304 of PROMESA (48 U.S.C. 2164), in connection with the review and approval of professional compensation under section 316 or 317 of PROMESA (48 U.S.C. 2176, 2177) filed after the date of enactment of this Act, the court may deny allowance of compensation or reimbursement of expenses if—(1)the professional person has failed to file the verified disclosure statements required under subsection (b)(1) or has filed inadequate disclosure statements under that subsection; or(2)during the professional person’s employment in connection with the case, the professional person—(A)is not a disinterested person (as defined in section 101 of title 11, United States Code) relative to any entity or person on the List of Material Interested Parties; or(B)represents or holds an adverse interest in connection with the case.

December 13, 2021Reported with an amendment