UNITED STATES DISTRICT COURT

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., 

Debtors.1

PROMESA 

Title III 

No. 17 BK 3283-LTS 

Re: ECF No. 21217

(Jointly Administered) 

LIMITED RESPONSE AND RESERVATION OF RIGHTS OF 

THE FINANCIAL OVERSIGHT AND MANAGEMENT BOARD ON 

BEHALF OF THE COMMONWEALTH OF PUERTO RICO TO SUCESIÓN 

PASTOR MANDRY MERCADO’S MOTION FOR LEAVE TO AMEND 

PROOF OF CLAIM KROLL NUMBER 6272

To the Honorable United States District Court Judge Laura Taylor Swain:

The Financial Oversight and Management Board for Puerto Rico (the “Oversight Board”), 

as sole Title III representative of the Commonwealth of Puerto Rico (the “Commonwealth”), 

pursuant to Section 315(b) of the Puerto Rico Oversight, Management, and Economic Stability 

Act (“PROMESA”),2respectfully submits this limited response and reservation of rights (the 

 

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 Building Authority (“PBA”) (Bankruptcy 

Case No. 19-BK-5523-LTS). (Title III case numbers are listed as Bankruptcy Case numbers due to software 

limitations).

2 PROMESA is codified at 48 U.S.C. §§ 2101-2241.

Case:17-03283-LTS Doc#:22664 Filed:10/21/22 Entered:10/21/22 12:45:26 Desc: Main

Document Page 1 of 6
2

“Response”) to Sucesión Pastor Mandry Mercado’s Motion for Leave to Amend Proof of Claim 

Kroll Number 6272 [Case No. 17-3283, ECF No. 22599]

3

(the “Motion”).

RELEVANT BACKGROUND

1. On April 19, 2018, Sucesión Mandry (as defined in the Motion) filed proof of claim 

number 6272 for $30,000,000, asserting a claim arising from the alleged inverse condemnation of 

its properties by the Commonwealth, as subsequently determined by the Court of First Instance of 

Puerto Rico, Superior Section of Ponce (the “Court of First Instance”), in the case styled Salvador 

Eduardo Mandry Nones, et. als. vs. Commonwealth of Puerto Rico, et. als., Case No. JAC-2008-

0853. 

2. On January 18, 2022, the Court entered the Order and Judgment Confirming 

Modified Eighth Amended Title III Joint Plan of Adjustment of the Commonwealth of Puerto Rico, 

the Employees Retirement System of the Government of the Commonwealth of Puerto Rico, and 

the Puerto Rico Public Buildings Authority [ECF No. 19813] (the “Confirmation Order”), 

confirming the Modified Eighth Amended Title III Joint Plan of Adjustment of the Commonwealth 

of Puerto Rico, et al., [ECF No 19784] (as amended, supplemented, or modified, the “Plan”).4 The 

Confirmation Order provides that, “[a]s of the commencement of the Confirmation Hearing, a 

proof of Claim may not be amended without the approval of the Title III Court.” Confirmation 

Order, ¶ 42.

3. The Plan provides:

From and after the Effective Date, (a) to the extent not modified 

prior thereto, the automatic stay extant pursuant to section 362 of 

the Bankruptcy Code shall be deemed modified in order to permit 

the holder of an Eminent Domain/Inverse Condemnation Claim to 

 

3

 Unless otherwise stated, all ECF Nos. shall refer to the docket in Case No. 17-3283.

4 Unless otherwise defined herein, capitalized terms shall have the meanings ascribed thereto in the Plan. 

Case:17-03283-LTS Doc#:22664 Filed:10/21/22 Entered:10/21/22 12:45:26 Desc: Main

Document Page 2 of 6
3

(i) liquidate such Eminent Domain/Inverse Condemnation Claim in 

such holder’s Eminent Domain Proceeding and (ii) cause the Clerk 

of the Court of First Instance to distribute to such holder the amount 

of monies on deposit with the Court of First Instance with respect to 

the condemned property, and (b) subject to the entry of the 

Confirmation Order or the Findings of Fact and Conclusions of 

Law in respect of the Plan providing such Claims must be paid 

in full to the extent they are Allowed Claims for just 

compensation, upon each such order becoming a Final Order, 

and upon the occurrence of another Final Order determining the 

validity and amount of just compensation attributable to an Eminent

Domain/Inverse Condemnation Claim, the holder of an Allowed 

Eminent Domain/Inverse Condemnation Claim shall be entitled to 

receive, in full consideration, satisfaction, release, and exchange of 

such holder’s unpaid balance of its Allowed Eminent 

Domain/Inverse Condemnation Claim, in Cash, one hundred 

percent (100%) of such Allowed Eminent Domain/Inverse

Condemnation Claim; provided, however, that, in the event that (x) 

the Oversight Board appeals from the Confirmation Order and the 

Findings of Fact and Conclusions of Law regarding the Title III 

Court’s ruling that Allowed Eminent Domain/Inverse 

Condemnation Claims must be paid in full or otherwise be rendered 

unimpaired pursuant to the Plan, (y) such appeal is successful, and 

(z) a Final Order is entered holding that Allowed Eminent 

Domain/Inverse Condemnation Claims may be impaired, subject to 

the terms and provisions of Articles LXXVII and LXXXII of the 

Plan, each holder of an Allowed Eminent Domain/Inverse 

Condemnation Claim shall be entitled to receive, in full 

consideration, satisfaction, release, and exchange of such holder’s 

unpaid balance of its Allowed Eminent Domain/Inverse 

Condemnation Claim, and the Reorganized Commonwealth shall 

make, payments, in Cash, in an amount equal to the pro rata 

payments to be made to holders of Allowed CW General Unsecured 

Claims up to the GUC Recovery Cap.

Plan, § 58.1 (emphasis added).

4. The Court of First Instance’s holding was affirmed on appeal, and subsequently, on 

April 1, 2022, the Supreme Court of Puerto Rico denied the Commonwealth’s second motion to

Case:17-03283-LTS Doc#:22664 Filed:10/21/22 Entered:10/21/22 12:45:26 Desc: Main

Document Page 3 of 6
4

reconsider the denial of the Commonwealth’s petition for certiorari from the Commonwealth Court 

of Appeals, rendering the decision of the Court of First Instance final. 

5. On August 31, 2022, Sucesión Mandry filed proof of claim number 179550 for 

$30,496,000, purporting to amend its original claim.

6. On October 13, 2022, Sucesión Mandry filed the Motion, seeking leave of the Court 

to permit Sucesión Mandry to amend its proof of claim to be $34,306,290.84. 

7. On October 13, 2022, the Court entered an order establishing October 27, 2022 at 

5:00 p.m. (Atlantic Standard Time) as a response deadline for the Motion.

8. On October 17, 2022, the Oversight Board filed a petition for certiorari to the 

United States Supreme Court seeking review of the First Circuit Court of Appeal’s ruling affirming 

this Court’s holding that Eminent Domain/Inverse Condemnation Claims (as defined in the Plan) 

may not be discharged pursuant to the Plan without paying such claims in full. As of the date 

hereof, the United States Supreme Court has not determined whether to grant the Oversight 

Board’s petition for certiorari.

LIMITED RESPONSE AND RESERVATION OF RIGHTS

9. The Oversight Board does not object to the limited relief requested in the Motion, 

i.e., the amendment of the proof of claim.

10. Pursuant to Plan, however, until the Confirmation Order provisions requiring 

Eminent Domain/Inverse Condemnation Claims must be paid in full to the extent they are Allowed 

Claims for just compensation become a Final Order (as defined in the Plan), the Commonwealth 

is not required to pay just compensation to any such claimants, other than to “distribute to such 

holder the amount of monies on deposit with the Court of First Instance with respect to the 

condemned property[.]” Plan § 58.1. In accordance therewith, as of the date hereof, and pending 

Case:17-03283-LTS Doc#:22664 Filed:10/21/22 Entered:10/21/22 12:45:26 Desc: Main

Document Page 4 of 6
5

the decision of the United States Supreme Court regarding the petition for certiorari, the Oversight 

Board has not made any payments to any holders of Eminent Domain/Inverse Condemnation 

Claims (other than by distributing monies on deposit with the Court of First Instance).

11. Additionally, the Oversight Board reserves all rights to object to the amount of the 

Allowed Claim asserted by Sucesión Mandry, including, without limitation, the amount, if any, of 

pre-judgment, post-judgment, and/or post-petition interest that constitutes an Allowed Claim under 

the Plan. 

[Remainder of Page Intentionally Left Blank]

Case:17-03283-LTS Doc#:22664 Filed:10/21/22 Entered:10/21/22 12:45:26 Desc: Main

Document Page 5 of 6
6

WHEREFORE the Oversight Board requests the Court respectfully takes notice of the 

foregoing, and grants such relief as is just and proper. 

Dated: October 21, 2022

San Juan, Puerto Rico

Respectfully submitted,

/s/ Brian S. Rosen

Martin J. Bienenstock (pro hac vice)

Brian S. Rosen (pro hac vice)

PROSKAUER ROSE LLP

Eleven Times Square

New York, NY 10036

Tel: (212) 969-3000

Fax: (212) 969-2900

Attorneys for the Financial Oversight and 

Management Board as representative for the 

Commonwealth of Puerto Rico

/s/ Hermann D. Bauer

Hermann D. Bauer

USDC No. 215205

O’NEILL & BORGES LLC

250 Muñoz Rivera Ave., Suite 800

San Juan, PR 00918-1813

Tel: (787) 764-8181

Fax: (787) 753-8944

Co-Attorneys for the Financial Oversight and 

Management Board as representative for the 

Commonwealth of Puerto Rico

Case:17-03283-LTS Doc#:22664 Filed:10/21/22 Entered:10/21/22 12:45:26 Desc: Main

Document Page 6 of 6