Muni Restructuring Firm Formed by Ex-Citi Bankers Is Dissolving
(Bloomberg) — In 2024, the former Citigroup Inc. BGC Partners Advisory, a boutique restructuring firm founded by public finance bankers, is disbanding.
Puerto Rico’s financial oversight board, which oversees the island’s spending and bankruptcies of government agencies, was a major client of BGC and received notice from the firm of its plans to disband. A person with direct knowledge of the matter, who asked not to be named discussing the situation, confirmed BGC’s disbandment.
“BGC has informed the supervisory board that it intends to terminate its partnership, and the supervisory board will communicate its decision regarding its financial advisor at the appropriate time,” board spokesman Matthias Rieker said in an email. “The supervisory board does not expect BGC’s decision to have any impact on the restructuring of Prepa debt,” Rieker said, referring to the Puerto Rico Electric Power Authority.
David Brownstein, the former head of Citi’s now-defunct public finance department, who worked on the largest bankruptcies in the municipal market, and former Citi colleagues John Gavin and James Castiglioni founded BGC in January 2024. BGC did not comment on the issue.
BGC’s dissolution follows the expiration of its most recent contract with the financial oversight board on June 30, according to the latest contract letter between the firm and its board of directors. BGC filed its final application with Puerto Rico’s bankruptcy court in September for damages covering fees and expenses through the end of that month, according to the court filing.
The island’s state-owned electricity utility, Prepa, has been in bankruptcy since 2017. Bondholders and the supervisory board have yet to reach an agreement on how to reduce nearly $9 billion in outstanding debt. Progress on the bankruptcy stalled last year as the court tried to resolve a dispute between bondholders and the board over Prepa’s revenues before discussing any restructuring proposals. This change greatly reduced BGC’s workload.
BGC came under criticism on social media in August after far-right activist Laura Loomer highlighted the group’s $850,000 monthly salary. The Trump administration fired most of the board members at that time, citing the island’s long-running bankruptcies. However, the delegation’s work led to a $55 billion cut in creditor payments in 40 years. Three members sued for reinstatement, and in October a judge ruled they could continue their work on the board while the case was pending.
Castiglioni, Citi’s former head of financial structuring, started as managing director of Huntington National Bank’s New York City office on Monday, according to Samantha Costanzo, the bank’s head of public finance.
Castiglioni worked at Citi for nearly 14 years, including five years as an executive where he helped execute more than 50 municipal debt transactions totaling $50 billion, according to his LinkedIn page.
Castiglioni will be a senior banker at Huntington covering clients across the U.S. and will provide financial modeling expertise to the team, according to Costanzo.
“James has significant experience working with some of the largest and most complex issuers in the United States and will help us continue to deepen and expand our client coverage,” Costanzo said in an email.
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