Ok guys here are some quick excerpts from the news over the last several days that shed light on the Doral Financial Corp (DRL) settlement negotiations. emphasis mine, interpretation mine
Thursday:
From the press releases we can see an agreement is drafted by Thursday, August 21, 2014. The Government of Puerto Rico introduce Foley & Lardner to help fit the final draft agreement and tax vouchers into existing local tax law.
Doral see's a conflict of interest because Foley & Lardner were their previous council. A motion is filed seeking Judge Laureana Pérez Pérez's advice and the press interprets this as a negotiation breakdown.
Friday Morning:
A decision is made by the Judge and Foley & Lardner are authorized to advise the government strictly within the scope of tax law and help interpret the tax vouchers into existing law. Only they are not permitted into the negotiation room but can advise from a neighboring room.
We can see from Thursday's press release Friday Morning was the actual deadline but no worries because the final draft agreement had already been authored Thursday.
What lays ahead from Friday morning on is the ratification of the final draft agreement into law. This was expected at the end of the 10 day settlement talks. We don't know what details are included but an agreement has been forged. The task of weaving it into existing tax law is now the job of Judge Laureana Pérez Pérez. The timetable for that task can not be forced and will happen when it will happen. What happened in court from Friday morning until business days end was the Judges day of questions and answers to draft what ever laws and legislation are necessary to make the final draft agreement binding and satisfy all parties.
I fully expect Judge Pérez Pérez has been working on this throughout the weekend.
Disclosure: I was not at the court but having watched many such negotiations in the past and reading what came across the wire I see nothing unusual here. A statement will be issued only when Judge Laureana Pérez Pérez finalizes her work. To announce anything sooner would be political suicide and likely end her career. This is as middle of the road as I can interpret this information, I'm open to other ideas on the between the lines guess work. These things however follow an expected format but that's not to say something totally unexpected can't muck up the machine.
So there you have it, news can come as soon as Monday Morning or it may take days to write this settlement into law. News will first appear at the clerks office in the Civil Court of First Instance, San Juan Superior Division when it becomes filed into public record.
=================================================================================================
Here is an abbreviated list of the press releases. Everything is readily searchable on google but the harder to find stuff has been given links and translated from Spanish to English:
August 21, 2014
7:31 pm Update
Doral abandoned negotiations with Treasury
http://www.elnuevodia.com/doralabandonalasnegociacionesconhacienda-1838958.html
. . . Judge Laureana Pérez Pérez, had given Doral and Finance 10 working days to reach an agreement. This period culminated Friday morning, . . .
. . . the Government of Puerto Rico as the Foley & Lardner own LPP "believe strongly" that the alleged conflict of interest "is nonexistent."
. . . today was scheduled a meeting between the parties to discuss the final draft agreement. "That document, which was ready to be delivered and discussed as part of the negotiation . . .
But sources close to the negotiations indicate that Doral intended that these "vouchers", classified as securities were issued by the Commonwealth. "The commonwealth can not give it the name of Doral," said another source, implying that to issue debt, the government would first have to create legislation. The source also said the government could do what I do is to recognize those "vouchers" for a tax deduction, as long as they are sold as an asset of Doral and not the state.
The issue of "vouchers" was what led to the Hacienda resort to counseling Foley.
federal tax and securities laws, "said the government.
11:18a
*Doral Financial Spikes to High; Settlement Announcement Expected Today (Benzinga)
11:20a
New Statement from Doral Legal Counsel Matthew D. McGill Regarding Doral Negotiations with Hacienda (PR NewsWire)
"Doral has not left the negotiations. The Treasury Department attempted on Thursday to introduce into the negotiations so-called "business points" conceived by its new outside counsel, Foley & Lardner, that were contrary to the provisions of the agreement reached and sworn to by the parties in front of Judge Perez-Perez of the Court of the First Instance. Foley & Lardner recently represented Doral in a related matter and that raises a conflict of interest.
August 22, 2014
Finance and Doral continues to the negotiating table
http://www.elnuevodia.com/haciendaydoralsigueenlamesadenegociacion-1839386.html
On the one hand, the lawyer Matthew D. McGill of the firm Gibson, Dunn and Crutcher, representing Doral, said "Doral has not stopped the negotiations." It further argues that the judge Laureana Pérez Pérez agreed that negotiations will continue Friday under her supervision, but for now without the law firm Foley & Lardner.
. . . Treasury said it needs the expertise of a firm like Foley & Lardner, because as part of the deal is being discussed the possible viability of certain complex tax instruments such as coupons or vouchers in the amount of $ 700 million.
"The trial judge determined that the negotiations will continue today and only trial lawyers of Finance and Doral will be present. They will not be present at meetings of the Treasury legal advisors or Doral, other than the litigants. But (consultants) will be in rooms nearby advising clients. Foley will continue to advise the Treasury and the Government Development Bank on issues related to federal taxation and securities laws.
2:49p
Puerto Rico Department of Justice and Treasury Issue Joint Statement (PR NewsWire)
"The Puerto Rico Department of Treasury and the Department of Justice continue to work in good faith to reach a settlement with Doral that is in the best interests of the Commonwealth, while adhering to all applicable laws and regulations in agreement with the Court's instructions.
"The Judge of First Instance ruled that negotiations will continue today, and that only litigation attorneys for Treasury and Doral will be present. No legal advisors to Treasury or Doral, other than litigation attorneys, will be present in the meeting, but will be in nearby rooms advising their clients. Foley will continue to provide Treasury and GDB with advice on matters related to federal taxation and securities laws."
2:51p
Puerto Rico: Continues to Work In Good Faith With Doral Financial (Dow Jones)
2:52p
Puerto Rico: Treasury Advisors Vetted Through Robust Conflict Check Procedure (Dow Jones)
2:54p
*Puerto Rico Dept of Justice, Treasury Issue Joint Statement, Say Foley Will Continue to Advise on Doral, Still Working on Settlement (Benzinga)
