PRRADA
Bill: S.375 | Sponsor: Sen. Menendez, Robert (D-NJ)
Policy area: Law

Summary:
Puerto Rico Recovery Accuracy in Disclosures Act of 2021 or PRRADA
This bill requires professionals employed in debt adjustment cases involving Puerto Rico to file verified statements disclosing their connections with the debtor, creditors, and other interested parties before seeking compensation for their services.

To 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'').

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

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

SEC. 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.
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