The United States Bankruptcy Court for the District of Puerto Rico granted motions filed by the Office of the Commissioner of Financial Institutions of Puerto Rico (OCIF) that allow OCIF’s administrative enforcement action against The Phoenix Fund LLC to continue despite the fund’s Chapter 11 filing. The court also recognised the OCIF-appointed receiver, Driven, P.S.C., as authorised to act on behalf of the fund as debtor-in-possession. OCIF’s enforcement action followed an attempted examination of the fund that OCIF was unable to complete due to alleged noncompliance, leading to a consent order appointing Driven to conduct a special examination of the fund and its affiliated entities. OCIF later issued an amended complaint and receivership order directing the fund to cease taking new investments, ordering its liquidation, requiring cooperation with the receiver to take possession of assets and conduct investigations for an orderly liquidation, and appointing Driven on an interim basis pending a scheduled administrative hearing. In granting OCIF’s motions, the court held that the automatic stay did not apply under the Bankruptcy Code’s police and regulatory power exception because the proceeding was regulatory in nature and not a collection action, and it concluded that the receiver’s pre-petition management authority carried into the Chapter 11 case. The court ordered Driven, P.S.C. to inform it within 21 days how it intends to proceed in the bankruptcy case and noted that a status conference is scheduled for May 19, 2026 at 10:00 AM.
Office of the Commissioner of Financial Institutions of Puerto Rico 2026-03-11
Office of the Commissioner of Financial Institutions of Puerto Rico secures bankruptcy court order allowing continued Phoenix Fund liquidation enforcement and recognising receiver authority
The United States Bankruptcy Court for the District of Puerto Rico granted motions by the Office of the Commissioner of Financial Institutions of Puerto Rico allowing its enforcement action against The Phoenix Fund LLC to proceed despite the fund’s Chapter 11 filing. The court held that the Bankruptcy Code’s police and regulatory power exception applied and recognised OCIF-appointed receiver Driven, P.S.C. as authorised to act for the fund as debtor-in-possession, with its pre-petition management authority carrying into the Chapter 11 case.