International Insolvency – Puerto Rico – Luis C. Marini

We are a leading bankruptcy and restructuring firm in Puerto Rico. We partner with our clients to help them face virtually any aspect of an insolvency matter – whether it be creditors of a troubled company or an investor looking for the opportunity to purchase a distressed business or certain of its assets. Our lawyers have been involved in the largest and highest profile restructuring matters in Puerto Rico, including representing the Government of Puerto Rico and its public corporations in the ongoing financial restructuring of the Commonwealth of Puerto Rico with more than $120 billion of debt.

Our approach is not one-size-fits-all. We use our deep bench of insolvency practitioners to assemble cost-effective teams and develop and deploy bespoke transactions on behalf of our clients to navigate the unique challenges associated with each of our restructuring matters. Among our team members, we have a wide range of experience spanning nearly every business sector, including energy, transportation, cryptocurrency, banking, hospitality, healthcare, manufacturing, real estate, retail, telecoms, media and technology. While we vigorously defend our clients’ positions, we never lose sight of our pragmatic goal to find creative resolutions. We pride ourselves on anticipating potential problems and finding creative solutions to mitigate or eliminate risk. To do this, we focus on all aspects of our clients’ investments and goals.

Our team deftly navigates clients through business cycles, bankruptcies, complex restructurings and workouts. We focus on all areas of bankruptcy; restructuring; distressed acquisitions; commercial litigation; the Puerto Rico Oversight, Management & Economic Stability Act (PROMESA; as well as financial regulation and enforcement. Our lawyers have devised cutting-edge solutions for banks and other financial institutions, secured and unsecured creditors, debtors and borrowers, indenture trustees, distressed investors and other interested parties. We have extensive experience in handling Chapter 11 cases, pre-arranged and pre-packaged bankruptcies, out-of-court restructurings, refinancings, recapitalisations and asset sales. Our lawyers have particular strength in handling complex and sophisticated creditors’ rights matters for many of leading financial institutions and commercial banks in Puerto Rico. Moreover, we represent nontraditional banking clients, such as hedge funds and private equity firms, in distressed transactions and M&A, as well as regulators in financial enforcement actions.

Luis C. Marini-Biaggi is a Founding Member and Chair of the Bankruptcy & Insolvency Practice. Luis concentrates his practice on all aspects of insolvency matters, including bankruptcy, acquisition of distressed assets, public and private sector restructurings. He regularly represents financial institutions, private equity funds, purchasers of distressed debt or assets, as well as secured and unsecured creditors in insolvency matters and distressed acquisitions.

Since 2011, the international publication Chambers and Partners has ranked and recognised Luis as the only “Band 1” attorney for lawyers in bankruptcy and restructuring in Puerto Rico. As part of its overview of the Puerto Rico legal market, Chambers recently commented that: “[t]he economic climate has, however, contributed to an increased volume of bankruptcy and restructuring matters, an area currently led by [Marini Pietrantoni Muniz’s] Luis Marini.” Chambers and Partners (Latin America), Puerto Rico Overview. Chambers recently stated, quoting sources, that Luis “is an expert in federal bankruptcy cases“, “demonstrates full command of the subject“, is “one of the best bankruptcy lawyers in the country” and that “he is a reference in the market and is worthy of being at the absolute top of the market”. Past Chambers coverage has described Luis as “always impress[ive] in complex bankruptcy proceedings”, “responsive, detail oriented and thorough in his analysis of each case”. Chambers also quoted clients stating that “[i]f someone asks me for a recommendation regarding a lawyer that is specialized in bankruptcy, his is the first name that I would mention. He has a vast knowledge of this area, and in the context of litigation he is dedicated and gracious whilst remaining firm, and the proposals he brings to court are based on solid foundations.” Chambers also quotes sources describing Luis as “a great lawyer who has a deep knowledge of insolvency matters”, as being “remarkably attentive and succinct”, and that “he understands his clients’ needs and will do everything in his hands to help them succeed. It is a true pleasure to work with him.”

In addition, Luis has been recognised by LawDragon’s 500 Leading US Bankruptcy & Restructuring Lawyers; as a leading insolvency lawyer by Best Lawyers®, Puerto Rico Edition; and was named Lawyer of the Year (2020) for Bankruptcy & Restructuring in Puerto Rico, while the team was named Law Firm of the Year (2021) for Bankruptcy & Restructuring in Puerto Rico. He has been further recognised as a leading insolvency lawyer by the Legal 500®, and as a Litigation Star by Benchmark Litigation®.

Luis frequently writes and lectures on insolvency and bankruptcy matters, participating frequently on panels sponsored by various organisations, such as the Puerto Rico Chamber of Commerce, the American Bankruptcy Institute, the Federal Bar Association and the Puerto Rico Industrial Association, among others. He regularly provides seminars on various technical bankruptcy and insolvency issues to financial institutions, government entities, private funds and other entities throughout Puerto Rico.

Luis also served on the Local Bankruptcy Rule Committee of the United States Bankruptcy Court, District of Puerto Rico; on the Advisory Board for the American Bankruptcy Institute’s Caribbean Insolvency Symposium; and was an Associate Editor for the American Bar Association’s Bankruptcy, Insolvency and Litigation Committee.

He holds a Bachelor Degree in Business & Finance from the University of Michigan, and obtained his Juris Doctor from Georgetown University. Prior to founding Marini Pietrantoni Muniz LLC, Luis was a Capital Member, Head of the Litigation Department and Co-chair of the Bankruptcy, Restructuring & Insolvency Group at O’Neill & Borges LLC, having also practised in Washington, DC, at Shaw Pittman LLP (now Pillsbury Winthrop Shaw Pittman).

We represent all parties in bankruptcy cases, and typically focus on creditors, purchasers of assets, financial institutions and private equity funds.

It is very important to conduct due diligence of the entity, and for the distressed company considering bankruptcy, we typically partner with a financial adviser.

Our team handles all aspects of an insolvency matter, and we have been involved in the most complex bankruptcy sales and M&A transactions, which can be the most challenging to structure, negotiate and execute.

Recently, the Puerto Rico Government has gone through the largest municipal bankruptcy in the history of the US. We have been local counsel to the Puerto Rico Government in these matters. Meanwhile, the health and hospital industry in Puerto Rico has experienced recent distress, as have government contractors, crypto entities and manufacturers. Below is a brief list of recent engagements.

• Our team serves as Puerto Rico counsel for all Puerto Rico governmental agencies and instrumentalities in the Commonwealth’s US$120 billion restructuring – the largest and most complex municipal restructuring in US history.
• Our team represented the Puerto Rico Department of Treasury, the Puerto Rico Department of Labor, as well as the Puerto Rico State Insurance Fund with claims in excess of $70 million in the bankruptcy cases of five hospitals generally known as Grupo Hima Hospitals.
• Our team represented a syndicate comprised of Banco Popular de Puerto Rico, Banco Santander de Puerto Rico, FirstBank of Puerto Rico and the Economic Development Bank in preparing, filing and prosecuting the largest involuntary bankruptcy cases filed in Puerto Rico – against Betteroads and Betterecycling. The syndicate’s claims exceeded $120 million. As part of the engagement, the firm prosecuted the involuntary filing and obtained a judgement granting the involuntary filing as filed. The firm also negotiated a complex sale of dozens of asphalt plants, terminal and other facilities, which closed as part of a confirmed Chapter 11 plan.
• Our team represented a syndicate between FirstBank Puerto Rico and Banco Santander de Puerto Rico in the bankruptcy case of Puerto Rico Hospital Supplies. As part of such engagement, the firm successfully negotiated a sale of the lender’s collateral and obtained confirmation of a plan providing for such sale.
• Our group represented FirstBank Puerto Rico in the bankruptcy cases of Dollar Car Rental.
• Our attorneys have been lead counsel to Puerto Rico’s leading financial institutions and private equity banks in some of their largest bankruptcy and restructuring matters, such as the bankruptcy cases of Ciudadela, El San Juan Star, Farmacias El Amal, Mueblerias Mendoza, Industrias Vasallo, Diamond Palace Hotel & Casino, Farmacias El Amal, Palmas del Mar Country Club, Hospital Damas de Ponce, Hospital San Gerardo, Supermercados Grande, Best Western Ponce and Cabo Rojo Hotels, Iglesia Mision Cristiana, Hotel Serafina, Puerto Rico Hospital Supply, Gatsby Stores, among many others.
• Our attorneys have represented the purchaser of assets in some of the largest bankruptcy and restructuring matters, such as the bankruptcy cases of Caribbean Petroleum Group (Gulf gas stations), Palmas del Mar Country Club, Pueblo Supermarkets, Mobile Star, Valcor, among others.
• Our group represents Banco Popular de Puerto Rico in the bankruptcy case of Empacadora y Procesadora del Sur, a leading meat manufacturer.
• Our group represented Bautista Cayman Asset Company in litigation involving several shopping and retail centres across Puerto Rico.
• Luis Marini represented Banco Popular de Puerto Rico in a complex reorganisation and bankruptcy litigation related to a number of construction projects, commercial real estate buildings and credit facilities of over $210 million. As part of our representation, the team successfully structured a sale of the construction projects through a related affiliate’s bankruptcy proceeding (without the owner of the construction project having to file), assisted with the sale of tax credits and closed the transfer of the remaining assets to Banco Popular.
• Luis Marini and Mauricio O. Muñiz Luciano were counsel to Westernbank Puerto Rico in its collection, foreclosure and Racketeer, Influenced & Corrupt Organizations’ Act (RICO) claims of over $142 million against various international entities, where the firm successfully obtained summary judgement in favour of Westernbank, as well as the related defence of lender liability claims of over $1 billion, where the firm successfully obtained summary dismissal of such claims. This complex litigation resulted in ten published opinions.
• Luis Marini and Carolina Velaz represented the Economic Development Bank of Puerto Rico, the lender to Casiano Communications and Direct Responsource, companies that manage some of the premier newspapers, media and magazine publications in Puerto Rico and the Caribbean. As part of the representation, we successfully argued for the confirmation of the sale proposal supported by the Economic Development Bank, structured the sale and successfully blocked the approval of two competing plans and sale proposals.
• Luis Marini was part of the team representing Wells Fargo N.A., the secured creditor and indenture trustee, in the bankruptcy case of El Comandante Racetrack, in its successful pursuit and confirmation of a competing plan of reorganisation. This representation resulted in six published decisions.
• Luis Marini represented the Puerto Rico Tourism Development Fund, guarantor to publically traded bonds in excess of $20 million issued to finance a resort and golf course in Puerto Rico that is operated by Trump International. As part of the case, the team has assisted in structuring an open sale process, and successfully blocked a debtor in possession financing that would have subordinated our client’s interests.
• Luis Marini was counsel to Doral Bank, lender, in a case of first impression in this circuit, where the court adopted the lender’s position and held that the absolute-priority rule applied to individual Chapter 11 debtors. In re Lee Min Ho Chen, 482 B.R. 473 (Bankr. D.P.R., November 9th, 2012).
• In a case of first impression, the court sustained Mr Marini’s argument that the borrower had effectively waived the provisions of the automatic stay, through the waivers granted to the firm’s client prior to the bankruptcy case and during the case. In re Triple A & R Capital Investment, Inc., No. 14-04744.
• Counsel to secured lender, in a case of first impression in this circuit, where the court adopted the secured lender’s position and held, in an unpublished decision, that a pre-petition notification of accounts receivable constituted a foreclosure by a secured creditor that extinguished the debtor’s and estate’s interest in the property.
• The firm represents Banco Popular de Puerto Rico in a restructuring with a pharmaceutical manufacturing plant.
• Luis Marini previously represented one of the lenders under the fuel lines credit facility with a bank syndicate in the negotiations with the Puerto Rico Electric Power Authority (PREPA) and the restructuring of over $500 million in credit facilities.

We are most active in Puerto Rico. We also handle bankruptcy cases in courts within the US and the US Virgin Islands, partnering as appropriate with local counsel.

We regularly issue client alerts on developing areas of insolvency law, offer seminars to clients and provide news alerts on the latest cases and legal trends.

COVID has had a lasting effect on our practice. From virtual hearings and meetings, our practice has become much more virtual and, thus, that has allowed us to provide services beyond Puerto Rico at very effective and efficient rates. Inflation has led to a rise in insolvency and bankruptcies in Puerto Rico as well. Furthermore, Puerto Rico has seen an increasing trend of crypto and digital asset entities relocating to the country to take advantage of tax incentives available therein. That has led to substantial work in this industry, including insolvency mandates.

FinTech is an area that has been developing rapidly in Puerto Rico as a result of tax incentives available to that particular industry.

We expect an increase in commercial insolvencies as a result of inflation, increased costs for utility services and worker migration. There is also an increase in distressed M&A.