OBoard asks to hire advisory firm; top fee is $695/hr
The Financial Oversight and Management Board for Puerto Rico filed an application at the U.S. District Court to approve the hiring of Phoenix Management Services, LLC as financial advisor for the mediation team appointed in the Title III cases related to the Commonwealth’s bankruptcy proceedings.
According to the filing, Phoenix will provide support to “help resolve issues pertaining to the Commonwealth and its agencies, and provide any additional relief required to effectuate the foregoing.”
Phoenix is a 30-year-old boutique financial advisory firm, providing interim management, turnaround consulting, and investment banking services to a broad range of enterprises and their stakeholders. Phoenix has provided financial advisory and interim management services to municipalities, public corporations and their oversight boards for more than 20 years.
As part of the agreement, Phoenix’s staff — headed by Martha Kopacz — will receive hourly compensation ranging from $495 to $695 for senior managing directors; $400 to $650 for senior advisors; $395 to $525 for managing directors; $320 to $450 for directors and senior directors; $150 to $350 for vice presidents, associates and analysts; and $75 to $150 for support staff.
The Commonwealth and its agencies under Title III bankruptcy proceedings of the Puerto Rico Oversight, Management and Economic Stability Act (PROMESA) will pay the fees and expenses, the Oversight Board’s petition stated.
“The Oversight Board, as the Debtors’ representative, and the Mediation Team believe that, in light of the nature and complexity of the Title III Cases and Phoenix’s qualifications, the above rates, and the terms and conditions of Phoenix’s employment, are reasonable,” the Board said in its motion.
The petition does not specify how many people from Phoenix will work on the island’s restructuring.
The application was submitted almost a year after Kopacz spoke about Puerto Rico’s fiscal crisis during a conference hosted by the Puerto Rico Builders Association, as this media outlet reported.
During her speech, she said a lack of a formal intervention protocol, such as the ones in place in the U.S. mainland for governments in distress, is making Puerto Rico’s restructuring process “uncomfortable” and more challenging to address.
At the time, she suggested that elected political leaders make it their business to become partners with board members, to turn the government around and spur future economic growth.
Kopacz has more than 30 years of experience in restructurings, having advised debtors, creditors, and equity holders engaged in restructurings, served as a Court-appointed expert, examiner, and chapter 11 trustee, and has been retained as an interim president and chief restructuring officer at various times in her career.