IN THE UNITED STATES DISTRICT COURT 

FOR THE DISTRICT OF PUERTO RICO 

In re: 

THE FINANCIAL OVERSIGHT AND 

MANAGEMENT BOARD FOR PUERTO 

RICO, 

as representative of 

THE COMMONWEALTH OF PUERTO RICO, 

et. al. 

Debtors1

 PROMESA 

 TITLE III 

 

 (Jointly Administered) 

 CASE NO.: 17-BK-3283 (LTS) 

REPLY TO OBJECTION OF THE COMMONWEALTH OF PUERTO RICO TO LILIA 

 MOLINA RUIZ’S MOTION FOR RELIEF FROM STAY

TO THE HONORABLE COURT: 

NOW comes, Lilia Molina Ruiz (hereafter, “Ms. Molina”), represented by the 

undersigned counsel and respectfully prays and states: 

 I. INTRODUCTION AND RELEVANT BACKGROUND

1. On May 13, 2022, the Oversight Board filed the Four Hundred Sixty-Sixth 

Omnibus Objection (Substantive) of the Commonwealth of Puerto Rico to Deficient ADR 

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-BK4780-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).

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Claims [ECF No. 20797] (the “Objection”) objecting to Ms. Molina’s Asserted Claim (claim 

77585). 

 2. On September 11, 2022, Ms. Molina filed the Opposition to Four Hundred and 

Sixty-Sixth Omnibus Objection to Proof of Claim Number 77585 and for Relief from 

Automatic Stay [ECF No. 22145] (the “Response”), opposing the Objection, claiming that 

sufficient detail was provided in support of Movants’ claim for the return of certain 

livestock to Movant pursuant to the Judgment, and further requesting stay relief. 

3. In response to an order of the Title III Court [ECF No. 22171] deeming the 

Response solely an opposition to the Objection and terminating the request for stay relief 

without prejudice, on September 15, 2022, Ms. Molina filed a motion seeking relief from 

the automatic stay [ECF No. 22229]. 

4. On October 18th, 2022 the Commonwealth filed its objection to Ms. Molina’s 

motion for relief of stay, [ECF No. 22636]. 

5. Per briefing order entered on October 12th, 2022 [ECF No. 22585], Ms. Molina 

was granted until today to file her Reply to the Commonwealth’s objection. We submit our 

reply as follows. 

II. Ms. MOLINA’S REPLY TO THE COMMONWEALTH’S OBJECTION 

6. As indicated by the Commonwealth in its objection, this Court must examine the 

factors set forth in Sonnax Indus., Inc. v. Tri Component Prods. Corp. (In re Sonnax Indus., 

Inc.), 907 F.2d 1280, 1286 (2d Cir. 1990) to determine whether cause exists that may 

warrant relief from stay, as cause is not defined in the Bankruptcy Code. 

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7. No one factor is dispositive; instead, courts “engage in an equitable, case-by-case 

balancing of the various harms at stake” and will lift the stay only if the harm engendered 

by allowing the stay to remain in place outstrips the harm caused by lifting it. 

8. The Commonwealth posits that the Sonnax factors point toward maintaining the 

stay and against the relief Ms. Molina seeks. The Commonwealth’s position as to each 

factor is responded to in detail below. 

9. Ms. Molina disagrees with the Commonwealth. The stay is unwarranted in all 

respects because: a) the litigation in the state court ended with a final nonmonetary 

judgment, ordering the return of her animals; b) the Commonwealth has no equity nor 

interest in her property, and is not part of the Bankruptcy estate; and c) keeping Ms. 

Molina from seeking post judgment relief in the state court does not aid in anyway the 

restructuring of the Commonwealth’s debt; quite the contrary, the animals can only 

create a burden for the Commonwealth as they need to be cared for, fed, and housed, 

obviously at an expense to the Commonwealth, an ongoing liability. 

Moreover, claimant Molina stands to suffer irreparable harm, as the livestock, by 

its nature is subject to perishing for a number of reasons, including disease, theft, or 

other natural causes while out of her possession and control. 

Analysis of the Sonnax Factors 

10. The Commonwealth asserts that “the first Sonnax factor primarily focuses on 

whether the separate litigation would expeditiously resolve issues relevant to the 

bankruptcy case” (Objection, ¶ 26). The Commonwealth goes on to state that 

 “Here, Movant fails to identify any bankruptcy issue related to the 

Commonwealth’s Title III case that would be resolved by allowing Movant 

to proceed with the Litigation for the alleged wrongful seizure of animals 

that occurred seven (7) years ago, prior to the commencement of the 

Commonwealth’s Title III case”. (Objection, ¶ 27). 

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 11. Such assertion is a non sequitur, because there is no bankruptcy issue before 

the Court. If the movant is allowed to return to her litigation before the State Court, all 

that remains pending there would be execution of a nonmonetary judgment ordering the 

return of Movant’s animals. Such remedy has no bearing on the restructuring of Puerto 

Rico’s debt, and therefore has no bearing on any issue before this Honorable Court. Quite 

simply, the animals are not part of the Bankruptcy estate. 

 

12. The Commonwealth asserts as to the second Sonnax factor that: 

“the lack of any connection with or interference with the 

bankruptcy case—does not support lifting the stay. Lifting the stay 

and allowing Movant’s claim to proceed to final judgment would be 

a waste of the Commonwealth’s resources, would significantly 

interfere with the administration of the Title III case and circumvent 

the requirements in the Confirmation Order”. (Objection, ¶ 29). 

The Commonwealth further asserts that 

“allowing Movant’s claim to proceed to final judgment would force 

the Commonwealth to rush their assessment of Movant’s claim well 

in advance of the March 8, 2023 Court ordered deadline”. 

(Objection, ¶ 29). 

13. Movant already has a final, nonmonetary judgment. Because of this, the 

Commonwealth’s argument regarding the second Sonnax factor is misleading. There will 

be no waste of the Commonwealth’s resources, as this matter was fully litigated, and all 

that is pending is execution of the judgment by way of delivery of claimant’s animals. 

14. The Commonwealth asserts as to the fourth Sonnax factor—whether a 

specialized tribunal has been established to hear the cause of action at issue that “the 

Litigation was filed before the Commonwealth Court” therefore, factor 4 “weighs in favor of 

denying the Motion”. (Objection, ¶ 31). The Commonwealth fails to specify that the 

litigation on the merits has concluded, which fact supports granting relief from the 

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automatic stay. 

15. The Commonwealth asserts as to the fifth Sonnax factor—whether the debtor’s 

insurance carrier has assumed full financial responsibility for defending the litigation— 

that “no insurer of the Commonwealth has assumed any financial responsibility in 

connection with the Litigation” (Objection, ¶ 32) therefore this factor does not support 

granting the Motion. This is another non sequitur, as Movant’s claim before the State 

Court consisted of a challenge to the seizure of her animals, and their concomitant 

return, therefore not a casualty claim that could be object of insurance coverage of any 

kind. 

16. As to the Sixth Sonnax factor—whether the action essentially involves third 

parties rather than the debtor—the Commonwealth avers that: 

“the Litigation does not involve primarily third parties. Instead, 

Movant filed suit against the Commonwealth, and fails to show 

how any non-debtor parties in the Litigation are the primary 

parties to the action”......., 

and that “Therefore, Sonnax factor 6 weighs in favor of denying the Motion”. (Objection, ¶’s 

33 and 34). 

 17. Again, the Commonwealth fails to recognize that no litigation on the merits is 

pending; that no monetary award was sought by Movant, and none was therefore granted 

by the Court; that the Commonwealth has no equity in Movant’s property; and that 

Movant’s property is simply not part of the Bankruptcy estate. The Commonwealth fails to 

indicate to the Court that Ms. Molina’s property is in possession of a third party receiver, 

to wit, the Municipality of Bayamon, entity that was not a party in the case. 

18. The Commonwealth asserts as to the seventh Sonnax factor—whether the 

litigation could prejudice the interest of other creditors—that “the relief sought prejudices 

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other creditors through the depletion of the Commonwealth’s resources and attention, 

and by potentially allowing Movant to “skip the line” in the claims reconciliation process”. 

(Objection, ¶ 35-36). 

19. However, this assumes that, should this Honorable Court grant the lift of stay, 

the Commonwealth would have to defend against litigation, which is not the case, as the 

litigation on the merits before the state court is concluded having said court entered 

already a non-monetary judgment that is now final. 

20. Allowing this case to proceed to state court for execution of judgment by the 

return of certain animals belonging to the movant, in no way, shape or form would 

prejudice the interests of other creditors of the bankruptcy estate. The Commonwealth 

makes conclusory allegations that it would, but it fails to state exactly how that would 

happen. It misleadingly indicates that forcing the Commonwealth to litigate “issues that 

could be resolved through claims reconciliation would unnecessarily waste the 

Commonwealth’s resources” (Objection, ¶ 37). There is nothing else to litigate before the 

state court, and no claim to reconcile. 

21. As the Sonnax factors 10 and 11 the Commonwealth avers that: 

“The interest of judicial economy and the status of the Litigation 

also weigh against stay relief. The interests of judicial economy are 

not served by stay relief because the Commonwealth still has until 

March 8, 2023 to assess and make a determination regarding 

Movant’s Asserted Claim per the extension of the objection deadline 

and the Commonwealth’s Title III case provides a single, 

expeditious forum for the resolution of claims. Accordingly, 

Movant’s Asserted Claim should be liquidated through the claims 

resolution process in these Title III cases to preserve judicial 

economy. Thus, Sonnax factors 10 and 11 weigh in favor of denying 

the Motion”. (Objection, ¶ 38). 

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22. This argument is unavailing, as Ms. Molina’s claim before the state court 

resulted in a judgment providing a non-monetary award that is not subject to liquidation. 

Movant believes that the claims resolution process in these Title III cases contemplate 

only litigation involving monetary claims. Movant’s claim is not of that kind as stated 

before. 

23. Regarding Sonnax factor 12--Balancing of the harms favors denial of the 

Motion-- the Commonwealth avers that “balancing of the harms favors denial of the 

Motion. The impact on the Commonwealth if the Motion were to be granted would 

outweigh any harm that Movant would suffer if the stay remains in place”. (Objection, 

¶39-40). 

24. This is yet another conclusory allegation from the Commonwealth as it fails to 

provide an explanation as to how an impact to the Commonwealth—yet to be specified---, 

would outweigh any harm movant would suffer. Movant continues to suffer the 

deprivation of her property, which by way of a final judgment its prompt return was 

ordered. 

25. The Commonwealth indicates that: 

“The property actually remains in dispute as the current status of the 

Litigation indicates that the Judgment has been remanded by the 

PRCA to the Commonwealth Court for reconsideration......Movant 

states no monetary award of any kind is involved in the Litigation 

against the Commonwealth—thus cause to lift the stay. Mot. at 5. 

However, Movant’s Asserted Claim is based on the Litigation. In 

addition, it is possible that, should Movant be successful in the 

reconsideration of the Judgment, the Litigation could result in some 

determination of monetary remedy against the Commonwealth. 

(Objection, ¶’s 40-41). 

26. Such averments are misleading on all counts for the following reasons. There 

are no motions to reconsider pending before the state court. This is so because on July 

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26, 2018, the state court gave the Commonwealth twenty (20) days to show cause why it 

had not complied with the dispositive part of the judgment, to wit, delivery of the animals 

to the Movant. In fact, it ordered the Commonwealth to inform the location of the animals. 

27. On August 14th, 2018 the Commonwealth informed that the animals were in 

possession of a third party, to wit, the Municipality of Bayamon, and had been placed 

under the care of the Municipality’s “Parque de las Ciencias”, a theme park that includes 

a zoo. In its motion to reconsider the July 26th, 2018 order on execution of the judgment, 

the Commonwealth moved to stay the post judgment proceedings under Title III 

PROMESA, but did not assert any impediment or infirmity as to the judgment itself which 

was already final. 

28. On August 29th, 2018, the state court granted the Commonwealth’s motion to 

reconsider only on grounds of the automatic stay under PROMESA, but the dispositive 

nature of the judgment remained unaltered. Therefore, and contrary to what is averred by 

the Commonwealth, there is no pending dispute that the animals must be returned to the 

Movant. 

29. Lastly, the Prepetition litigation cannot, under Puerto Rico’s Rules of Civil 

Procedure, result now in any kind of monetary judgment as the Commonwealth would 

want this Court to believe. The Movant never asserted any kind of monetary claim. 

Because of this, the final judgment did not award any monies to her, only the return of 

the illegally seized animals. Under the Puerto Rico Rules of Civil Procedure, this judgment 

is not subject to any kind of amendment, much less, including remedies that were never 

sought by the Movant herein. 

30. For this reason, the Commonwealth’s averment that “the Litigation could result 

in some determination of monetary remedy against the Commonwealth” (Objection, ¶ 41) 

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is completely inaccurate. The state level litigation has only one way to go: execution of 

judgment by order of delivery of the animals, which is the only remedy that the Movant 

may seek from the court that issued a judgment in her favor, once the stay is lifted. 

 III. CONCLUSSION 

31. In accordance with 11 U.S.C. §362 (d)(2), the automatic stay should be lifted 

because the Commonwealth of Puerto Rico has no equity or any kind of interest, 

proprietary or otherwise, in Ms. Molina’s livestock as the seizure was declared to be null 

and void by the Puerto Rico First Instance Court judgment for want of complying with 

applicable seizure and forfeiture proceedings. 

32. Additionally, and from the standpoint of the Title III proceedings, Ms. Molina’s 

position is that the under section 362 (d)(2) (A) & (B) of the Bankruptcy Code, the Court 

ought to grant relief of the automatic stay because such property is not necessary to an 

effective reorganization of the Commonwealth’s debt. 

33. Under 11 U.S.C.A. sec. 362 (d), a bankruptcy court may modify the automatic 

stay “for cause” to allow a pending action in a different court to continue its proceedings—

in this case, execution of a judgment for return of property, where there is no monetary 

award of any kind involved against the Commonwealth. In re Murray Industries, Inc., 121 

B.R. 635, 636 (Bankr. M.D. Fla. 1990). 

34. The Commonwealth has not met the ultimate burden of persuasion to establish 

that cause for relief does not exist under section 362 (d). In re Anton, 145 B.R. 767, 769 

(Bankr. E.D.N.Y. 1992). Regarding cause for relief from stay, Peerles Insurance Company 

v. Peerless Insurance Company, 208 B.R. 313, 315 (D.R.I. 1997) provided that: “Section 

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362 (d)(1) permits a “party in interest” to obtain relief from the Bankruptcy Code’s 

automatic stay provision “for cause.” 11 U.S.C. sec. 362(d)(1). The statute does not define 

“cause”; but generally speaking, “cause” is said to exist when the harm that would result 

from a continuation of the stay would outweigh any harm that might be suffered by the 

debtor or the debtor’s estate if the stay is lifted. 

 35. The livestock of course, is not part of the bankruptcy estate. No harm of any 

kind may befall upon the Commonwealth, within the purview of PROMESA and the 

protection it affords the Commonwealth, if the stay is lifted, and the matter must now go 

back to the Puerto Rico Court for the remainder of proceedings in execution of a judgment 

that is final at this point. 

36. Under Sonnax, MS. Molina has shown a “lack of any connection with or 

interference with the bankruptcy case,” is present for obvious reasons already spelled out 

hereunder; “whether litigation in another forum would prejudice the interests of other 

creditors,” is an inquiry that must be answered in the negative, for the reasons already 

stated; “the interests of judicial economy and the expeditious and economical resolution 

of litigation,” would be amply and justly served, remanding this matter to the Puerto Rico 

Court where it belongs; “whether the parties are ready for trial in the other proceeding,” 

is also met here, as no trial is necessary, there is already a final judgment; and the 

“impact of the stay on the parties and the balance of harms”. 

37. Here, the stay has prevented Ms. Molina from applying for remedies before the 

Puerto Rico Court, thus she has been adversely impacted. It bears to say that the 

Commonwealth’s plea for a stay—which the Puerto Rico Court granted, was an 

improvident, unfair and last-ditch effort to unduly retain Ms. Molina’s property. Sonnax, 

907 F. 2d, Id. at 1286. 

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38. Congress stated as part of the legislative history to section 362 (d)(1), that: “it 

will often be more appropriate to permit proceedings to continue in their place of origin, 

when no great prejudice to the bankruptcy estate would result, in order to leave the 

parties to their chosen forum and to relieve the bankruptcy court from many duties that 

may be handled elsewhere.” H.R. Rep. No. 95-595, at 341 (1977); S.Rep. No. 95-989, at 

50 (1978), reprinted in 1978 U.S.C.C.A.N. 5787, 5836. 

WHEREFORE, it is respectfully requested that this Honorable Court to consider 

the instant reply brief to the Commonwealth’s objection, along with Ms. Molina’s motion 

seeking relief from the automatic stay. 

RESPECTFULLY SUBMITTED. 

 In San Juan, Puerto Rico, this 25th day of October, 2022. 

CERTIFICATE OF SERVICE: I hereby certify that on this date, I electronically filed the 

foregoing with the Clerk of the Court using the CM/ECF system which will send notice 

electronically to all counsel of record and will provide hard copies to the Court and United 

States Trustee as soon as practical after the filing of the foregoing, consistent with the 

Court’s Sixteenth Amended Case Management Order. See Docket No. 20190-1. 

Dated: October 25th, 2022. 

S/JOSE LUIS NOVAS DEBIÉN 

USDC-PR #213905 

PMB 382 

Calaf 400 

San Juan, Puerto Rico 00918 

Tel.: 787-754-8300 

E-mail:jnovas1@gmail.com

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