1

UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF PUERTO RICO

-------------------------------------------------------------------x

In re:

THE FINANCIAL OVERSIGHT AND

MANAGEMENT BOARD FOR PUERTO RICO,

as representative of

THE COMMONWEALTH OF PUERTO RICO et al.,

Debtors.1

-------------------------------------------------------------------x

PROMESA

TITLE III

Case No. 17-BK-3283-LTS

(Jointly Administered)

STATUS REPORT OF THE AVOIDANCE ACTIONS TRUSTEE 

IN CONNECTION WITH THE COURT’S AVOIDANCE ACTION PROCEDURES

Drivetrain, LLC (“Trustee”), in its capacity as the trustee of the Commonwealth Avoidance 

Actions Trust, respectfully submits this timely status report (“Status Report”) in compliance with 

Part III of the Court’s Avoidance Action Procedures [DE No. 20937, Appendix 2] (“Procedures”) 

and respectfully states as follows:

STATUS REPORT

1. Pursuant to the Court’s Procedures, the Trustee respectfully submits the attached 

Exhibit A (“Case Update”), which provides a “brief update on the status of each Avoidance 

1 The Debtors in these Title III Cases, along with each Debtor’s respective Title III case 

number and the last four (4) digits of each Debtor’s federal tax identification number, as applicable, are the 

(i) Commonwealth of Puerto Rico (Bankruptcy Case No. 17-BK-3283- LTS) (Last Four Digits of Federal 

Tax ID: 3481); (ii) Puerto Rico Sales Tax Financing Corporation (“COFINA”) (Bankruptcy Case No. 17-

BK-3284-LTS) (Last Four Digits of Federal Tax ID: 8474); (iii) Puerto Rico Highways and Transportation 

Authority (“HTA”) (Bankruptcy Case No. 17-BK- 3567-LTS) (Last Four Digits of Federal Tax ID: 3808); 

(iv) Employees Retirement System of the Government of the Commonwealth of Puerto Rico (“ERS”) 

(Bankruptcy Case No. 17-BK- 3566-LTS) (Last Four Digits of Federal Tax ID: 9686); (v) Puerto Rico 

Electric Power Authority (“PREPA”) (Bankruptcy Case No. 17- BK-4780-LTS) (Last Four Digits of 

Federal Tax ID: 3747); and (vi) Puerto Rico Public Buildings Authority (“PBA”) (Bankruptcy Case No. 

19-BK-5523-LTS) (Last Four Digits of Federal Tax ID: 3801) (Title III case numbers are listed as 

Bankruptcy Case numbers due to software limitations). 

Case:17-03283-LTS Doc#:22331 Filed:09/20/22 Entered:09/20/22 16:33:41 Desc: Main

Document Page 1 of 5
2

Action, including (as to each such action that remains pending at such time) whether the parties 

are engaging in informal settlement discussions, the schedule established for mediation, and 

whether the Trustee expects the Avoidance Action to be litigated.” [Procedures, DE No. 20937, 

Appendix 2, Pt. III, § (i)].

2. As part of the Status Report, the Trustee summarizes certain data points contained 

within the attached Case Update. 

3. First, the Trustee has communicated more than once with each defendant to 

establish dates for a pre-trial mediation. Second, the Trustee has established a roster of highly 

regarded and respected mediators from which the parties may select. The Trustee has also 

considered other mediators in those few instances in which a defendant has suggested a mediator 

who was not represented on the Trustee’s roster.

4. Third, the Trustee is pleased to report that it has made substantial progress in 

scheduling mediations and engaging with counsel for the defendants in the Avoidance Actions, 

many of which counsel have been responsive. 

5. The Court may consider the following information to be relevant in reviewing the 

Case Update: 

a. There are fifty-one (51) Avoidance Actions that are subject of the 

Court’s Procedures.2

b. The Trustee has sent each of the defendants in the Avoidance Actions 

an invitation to mediate. 

2 The Trustee notes that the Procedures apply to a smaller universe of avoidance actions than 

the universe transferred to the Trust pursuant to the Plan because the Plan included cases where: the Court 

has entered a default judgment against a defendant (e.g., Adv. Proc. Nos. 19-00268, 19-00122, 19-00129, 

19-00222, 19-00249, 19-00098, 19-00200, 19-00187); a defendant had filed for bankruptcy relief; or 

procedures were not suitable. 

Case:17-03283-LTS Doc#:22331 Filed:09/20/22 Entered:09/20/22 16:33:41 Desc: Main

Document Page 2 of 5
3

c. In each invitation to mediate, the Trustee solicited dates for mediation,

provided the curriculum vitae for the roster of mediators, indicated that 

the Trustee would provide its detailed, written position regarding the 

pending claims in advance of mediation (“Position Papers”), and 

expressed an openness to narrow issues before mediation. 

d. The Position Papers are the result of a factual and legal analysis of the 

issues related to each individual claim, including consideration of any 

defenses raised by the defendant or tolled party. The Trustee has now 

submitted twenty-two (22) Position Papers to the defendants and will 

submit Position Papers to each defendant in advance of mediation as 

those mediations are scheduled. 

e. The Trustee has already completed mediation with seven (7) defendants. 

f. The Trustee has scheduled an additional fifteen (15) mediations to 

occur. Due to scheduling, some Defendants have requested mediation 

in the first quarter of 2023. 

g. The Trustee has tentatively scheduled mediations (or is in the process 

of re-scheduling previously-scheduled mediations) in nine (9) of the 

Avoidance Actions.

h. The Trustee has engaged in several informal communications with 

twelve (12) defendants and hopes to schedule mediation with them in 

the near term. 

i. The Trustee reports that only six (6) defendants have failed to respond 

to the Trustee’s invitation to mediate, despite repeated communications. 

Case:17-03283-LTS Doc#:22331 Filed:09/20/22 Entered:09/20/22 16:33:41 Desc: Main

Document Page 3 of 5
4

The Trustee will nonetheless endeavor to schedule mediation with such 

defendants notwithstanding the unresponsiveness to date.

j. The Trustee has filed a notice of dismissal in one Avoidance Action in 

light of a fully performed settlement.

k. The Trustee has reached a settlement in principle with one Avoidance 

Action defendant following mediation and is in the process of 

documenting that settlement. 

6. In addition to the Avoidance Actions Defendants, the Trustee has used the 

opportunity to engage with parties subject to tolling agreements (“Tolled Parties”) even though 

they are not subject to the Court’s Order implementing the Procedures. In those instances, the 

Trustee has invited the Tolled Parties to mediation, using the exact same process as for the 

Avoidance Action defendants, although acknowledging that participation in voluntary. 

7. Mindful of the confidentiality imposed by the tolling agreements, the Trustee can 

report the following:

a. The Trustee has invited 100 per cent (100%) of the Tolled Parties to mediation.

b. Seventy-seven per cent (78%) of the Tolled Parties have agreed to mediation. 

c. Thirty percent (28%) of the Tolled Parties have already scheduled mediation.

d. Twenty-seven percent (50%) of the Tolled Parties are in the process of scheduling 

mediation.

e. Thirty-three percent (33%) of the Tolled Parties have received a Position Paper 

from the Trustee. 

f. Only seventeen (17%) of the Tolled Parties have failed to respond to the Trustee’s 

invitation to mediate, despite repeated communications.

Case:17-03283-LTS Doc#:22331 Filed:09/20/22 Entered:09/20/22 16:33:41 Desc: Main

Document Page 4 of 5
5

8. The Trustee appreciates the efforts of the defendants and their counsel who have 

been responsive throughout this process. 

Dated this 20th day of September 2022

Respectfully submitted by: 

/s/ John Arrastia

John Arrastia, Esq. (Pro Hac Vice)

Jesus M. Suarez, Esq. (Pro Hac Vice)

Angelo M. Castaldi, Esq. (Pro Hac Vice)

CONTINENTAL PLLC

255 Alhambra Cir. Suite 640 

Coral Gables, FL 33134

Tel: 305-677-2707

JArrastia@continentalpllc.com

JSuarez@continentalpllc.com

ACastaldi@continentalpllc.com

Counsel to the Trustee

/s/ Juan J. Casillas Ayala

Juan J. Casillas Ayala, Esq. (USDC-PR 218312)

Luis F. Llach Zúñiga, Esq. (USDC-PR 223112)

Juan C. Nieves González, Esq. (USDC-PR 231707)

Edna Tejeda Oyola (USDC-PR 219803)

CASILLAS, SANTIAGO & TORRES LLC 

El Caribe Office Building 

53 Palmeras Street, Ste. 1601 

San Juan, Puerto Rico 00901-2419 

Telephone: (787) 523-3434 

jcasillas@cstlawpr.com

lllach@cstlawpr.com

jnieves@cstlawpr.com

etejeda@cstlawpr.com

CERTIFICATE OF SERVICE

I HEREBY CERTIFY that on September 20, 2022, I electronically filed the foregoing 

motion with the Clerk of the Court using the CM/ECF system, which will send notification of such 

filing to all appearing parties in the captioned proceeding. 

/s/ John Arrastia

John Arrastia, Esq.

Case:17-03283-LTS Doc#:22331 Filed:09/20/22 Entered:09/20/22 16:33:41 Desc: Main

Document Page 5 of 5