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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

CIVIL NO. 17-3283 (LTS)

TITLE III PROMESA

MOTION FOR RELIEF FROM STAY

TO THE HONORABLE COURT:

COMES NOW Ms. Keila García Colón (hereinafter, “Ms. García”), the plaintiff in the 

matter of García Colón v. Corporation of the State Insurance Fund (“CSIF”), Civil No. 21-cv01211 (RAM) pending before the United States District Court for the District of Puerto Rico, 

through the undersigned counsel, and very respectfully alleges and prays as follows:

1. Ms. García is the plaintiff in Civil No. 21-1211 (RAM), pending before the United States 

District Court for the District of Puerto Rico. See, Exhibit 1, Verified Complaint (DE 1).

2. Currently, the case was stayed by the Chief Judge based on the automatic stay of the Puerto 

Rico Oversight, Management and Economic Stability Act (hereinafter, “PROMESA”), 48 

U.S.C.S. §2101-2241, which incorporates Sections 362 and 922 of the Bankruptcy Code, Title 

11 of the United States Code. See, Exhibit 2, Memorandum and Order (DE 86).

3. The underlying issue for the intended Lift of Automatic Stay hinges on whether the CSIF can 

benefit from the mentioned automatic stay provisions and avoid the prosecution of plaintiff’s 

action is automatically protected by the due to its status as an “instrumentality” of the 

Commonwealth of Puerto Rico. 

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4. The CSIF is a self-capitalized public corporation that has not filed a petition for relief under 

Title III of PROMESA. 

5. A review of the CSIF’s Motion to Dismiss (DE 31), filed well before its Answer to the Verified 

Complaint, reveals the dearth of any mention about the CSIF’s alleged entitlement to 

PROMESA’s automatic stay for having filed a petition for relief under Title III of the statute. 

See, Exhibit 11, Motion to Dismiss (DE 31).

6. Hence, the issue becomes whether the CSIF is protected by the Commonwealth’s automatic 

stay as a result of its filing a Title III petition or whether it is unprotected and the stay ordered 

by the district court should be lifted because it never filed a petition under Title III of 

PROMESA. 

7. On May 6, 2021, Ms. García filed case Civil No. 21-1211 (RAM), where she sued the 

Corporation of the State Insurance Fund (“CSIF”) for violation of her rights under Title VII of 

the Civil Rights Act of 1964, when she was subjected to unlawful sexual harassment and 

retaliation. Docket Entry (“DE”) 1. See, Exhibit 1.

8. In her action, García seeks preliminary and permanent injunctive relief, as well as 

compensatory and emotional damages from defendants for the damages she suffered and 

continues to suffer as a proximate result of the unlawful conduct by the CSIF. Ibid.

9. On June 4, 2021, the district court entered a Stipulated Preliminary Injunction Order and 

vacated the preliminary injunction hearing scheduled for the following Monday. DE 50.

10. Thereafter, parties filed their Joint Case Management Memorandum (DE 78) and commenced 

discovery proceedings. See, Exhibit 3, Joint ISC Memorandum (DE 78).

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11. The CSIF did not affirmatively raised the automatic stay as a bar to the prosecution of the 

action against it. See, Exhibit 4, Answer to the Complaint (AFFIRMATIVE DEFENSES), pp. 

48-49 (DE 82); see also, Exhibit 3, Joint ISC Memorandum, pp. 7-16.

12. On December 1, 2021, the court held the Case Management Conference and sua sponte ordered 

the parties to show cause why the damages claims should not be stayed under PROMESA’s 

automatic stay provisions of sections 362 and 922 of the Bankruptcy Code. DE 80. See, Exhibit 

5, Minutes of ISC (DE 80).

13. García argued that, in Colón Torres v. Negrón Fernández, 997 F.3d 63, 67 (1st Cir. 2021), the 

First Circuit had the opportunity to analyze “the scope of the automatic stay provision in Title 

III of PROMESA which expressly incorporate[d] Sections 362 and 922 of the Bankruptcy 

Code.” See, Exhibit 6, Motion to Show Cause (DE 84).

Section 362(a)(1) stays: 

a proceeding against the debtor that was or could have been commenced before the 

commencement the case under this title [the Title III proceeding] or to recover a 

claim against the debtor that arose before the commencement of the case under this 

title [the Title III proceeding]. 

Section 922(a)(1) stays: 

the commencement or continuation, including the issuance of employment of 

process, or a judicial, administrative, or other action or proceeding against an 

officer or inhabitant of the debtor that seeks to enforce a claim against the 

debtor. 

14. The court went on to explain that:

PROMESA was enacted in 2016 to help the Commonwealth of Puerto Rico 

combat its rapidly ballooning government debt crisis. To do so, PROMESA 

creates a voluntary, in-court bankruptcy process for the Commonwealth and 

its instrumentalities1 modeled on the reorganization process for 

1 Unlike other instrumentalities of the Commonwealth, the CSIF has not filed a petition for relief under 

Tittle III. Cf. Puerto Rico Electric Power Authority (CIVIL NO. 17-bk-4780-LTS); Puerto Rico Highway 

Transportation Authority (CIVIL NO. 17-bk-3567-LTS). 

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municipalities, codified in Chapter 9 of the Bankruptcy Code. See 48 U.S.C. 

§§ 2161 (incorporating various provisions of Chapter 9); Andalusian Glob. 

Designated Activity Co. v. F.O.M.B. (In re F.O.M.B.), 954 F.3d 1, 7-8 (1st 

Cir. 2020) (stating that the appropriate analogy to a PROMESA Title III 

proceeding is a Chapter 9 municipal reorganization). Like a Chapter 9 

petition, a Title III petition triggers an automatic stay on certain actions that 

seek to enforce claims against the filing "debtor." See 48 U.S.C. § 2161 

(incorporating the automatic stay provisions of the Bankruptcy Code, 11 

U.S.C. §§ 362, 922 into PROMESA). Therefore, when the Commonwealth 

filed its Title III petition in May 2017, it became a "debtor" for purposes of 

PROMESA, and all actions enforcing a claim against the Commonwealth 

were automatically stayed. 

Id., at 69 (emphasis added).

15. Hence, García argued that, for the CSIF to be entitled to the automatic stay provisions of 

PROMESA, it was required to file a petition for relief under Title III of the statute. See,

Exhibit 6, ¶5.

16. García informed the court that her search of the docket had revealed that the CSIF had not 

filed such a voluntary petition for relief under Title III of PROMESA and, therefore, it was not 

a “debtor” under 11 U.S.C. §362(a)(1) or §922(a)(1) entitled to protection from García’s claim 

for damages. See, Exhibit 6, ¶6.

17. Notwithstanding, the CSIF filed a “Motion for Automatic Stay under Title III of PROMESA.”

See, Exhibit 7. In it, the CSIF claimed it was a debtor and entitled to the stay although it has 

been defending other cases before the district court and the First Circuit. See e.g., Colón Torres,

supra; see also, Santiago-Santiago v. State Insurance Fund, Civil No. 21-01610 (JAG); 

compare, United States v. Puerto Rico Industrial Development Company, Appeal No. 19-1874 

(decided November 17, 2021) (PRIDCO is also an instrumentality of the Commonwealth and 

will satisfy the judgment affirmed by the First Circuit with money from its coffers.).

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18. On April 5, 2022, following what it found to be persuasive decisions of the Puerto Rico Court 

of Appeals resolving that the CSIF was covered by the automatic stay as an instrumentality of 

the Commonwealth, the district court ruled: “[a]s a result, the automatic stay is applicable to 

Plaintiff’s request for monetary relief, but the Court will retain jurisdiction to ensure 

enforcement of the stipulated preliminary injunction.” See, Exhibit 2, (DE 86). 

19. Hence, Ms. García files this motion seeking the lifting of the automatic stay ordered by the 

district court in Civil No. 21-1211 (RAM) because the CSIF has not filed a petition for relief 

under Title III of PROMESA and is, therefore, not a debtor entitled to the protection of its 

bankruptcy estate by means of the automatic stay. 

20. Moreover, as noted by the First Circuit in Colón Torres, it is not a clear-cut answer whether 

every instrumentality of the Commonwealth is a debtor subject to protection. The court, 

however, did not engage in any in-depth analysis to determine whether any favorable judgment 

to Ms. García and against the CSIF will have to be satisfied with the monies from the 

Commonwealth of Puerto Rico funds or from the CSIF’s coffers, since the CSIF is capitalized 

by the mandatory premiums paid by employers in exchange for the immunity from suit 

resulting from workers’ job-related accidents.

21. As a result of the automatic stay granted by the district court, and of the court’s decision to 

paralyze the case in its entirety, Ms. García is currently precluded from continuing the 

discovery proceedings that were under way. 

22. Section 362(d) (1) of the Bankruptcy Code permits the Court to grant relief from the automatic 

stay “for cause.” “Cause” can be defined to trigger, instigate or initiate among numerous 

meanings and synonyms. However, section 362(d) (1) is barren of a statutory definition of 

“cause”. 

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23. Since the Bankruptcy Code does not define “cause,” courts have held that allowing a matter to 

proceed in another forum exemplifies what may constitute cause to lift the automatic stay. 

Stephens v. Menninger (In re Credit Life Corp.), 184 B.R. 839, 841 (M.D. Fla. 1995); Murray 

Indus. v. Aristech Chem. Corp. (In re Murray Indus., Inc.), 121 B.R. 635, 636 (Bankr. M.D. 

Fla. 1990); Maintainco, Inc. v. Mitsubishi Caterpillar Forklift America, Inc. (In re MidAtlantic Handling Sys., LLC), 304 B.R. 111, 130 (Bankr. D. N.J. 2003); Izzarelli v. Rexene 

Prods. Co. (In re Rexene Prods. Co.), 141 B.R. 574, 576 (Bankr. D. Del. 1992). 

24. The legislative history of section 362(d) (1) supports this notion as well:

It will often be more appropriate to permit proceedings to continue 

in their place of origin, when no great prejudice to the bankruptcy 

estate2 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.3 

S. Rep. No. 95-989 at 50 (1978), reprinted in 1978 U.S.C.C.A.N. 5787, 

5836.

25. The definition of cause has evolved through case law. The case of Fernstrom and its progeny,

paved the way to identify “cause” by inquiring whether: a) Any great prejudice to either the 

bankrupt estate or the debtor will result from continuation of the civil suit; b) the hardship to 

the [non-bankrupt party] by maintenance of the stay considerably outweighs the hardship to 

the debtor; and c) the creditor has a probability of prevailing on the merits. In re Fernstrom 

Storage and Van Co., 938 F.2d 731 (7th Cir.1991).

2 García’s position is that no CSIF bankruptcy estate exists.

3 This objective will be fully satisfied if, as a result of the lift of stay, the District Court adjudicates Ms. 

García-Colón’s claims. 

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26. This list was expanded by the First Circuit Court, in cases on point that establish that the rule 

of law to determine cause under section 362(d) hinges on the factual scenario and a case-bycase analysis. Goya Foods, Inc. v. Unanue-Casal (In re Unanue-Casal), 159 B.R. 90, 96

(D.P.R. 1993), aff'd 23 F.3d 395 (1st Cir. 1994). 

27. Here, Ms. García-Colón’s request for a relief from stay should be granted since: (1) the CSIF 

has not filed a petition under Title III of PROMESA seeking protection from this Court and, 

therefore, cannot be prejudiced if the stay imposed by the District Court is lifted; (2) lifting the 

stay will permit the resolution of the pending and rightful claims in case Civil No. 21-1211

(RAM), and García-Colón can continue the proceedings in that case, obtain and collect on a

judgment; (3) the relief requested will not interfere with the proceedings in the instant case

because the Commonwealth will not be responsible to satisfy any monetary judgment against 

the CSIF which the District Court may eventually enter in her favor; (4) it is the judge who is 

assigned to Civil Case No. 21-1211 (RAM) who has the expertise and the constitutional grant 

of jurisdiction to adjudicate Ms. García-Colón’s legal claims in her Complaint, rather than the 

Bankruptcy Court; (5) relief is warranted in the interest of judicial economy and the 

expeditious and economical determination of litigation for the parties since the issues between 

Ms. García-Colón and the CSIF should be concluded in the District Court, where the case was 

originally filed, and because of that court’s jurisdiction and familiarity with her claims; and (6)

relief from stay is merited in this case, because it would unduly prejudice Ms. García-Colón if 

she continues to be precluded from prosecuting her causes of action.

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28. The Court should also bear in mind that the crux of the relief requested is to allow a full 

adjudication of the causes of action in Civil No. 21-1211 (RAM). As previously alleged, her

claims involve violations of Ms. García-Colón’s civil rights and the fundamental policies 

underlying the employment anti-discrimination and anti-retaliation statutes.

29. Therefore, it is very respectfully submitted that the balance of the equities, the interest of 

judicial economy, and the expeditious and economical determination of litigation constitute 

cause for relief from the automatic stay to allow Ms. García to prosecute the claims in her 

Verified Complaint in Civil No. 21-1211 (RAM).

30. Also, granting her the relief requested in the instant motion should be conducive to the 

elimination of issues before this Court if a final solution is reached through a judgment 

resulting from a jury verdict and/or settlement before the District Court.

CERTIFICATION OF COMPLIANCE WITH PRE-REQUISITES

FOR SUBMISSION OF PETITION FOR LIFT OF STAY

31. On August 18, 2022, the undersigned sent an email to Atty. Hermann D. Bauer at 

hermann.Bauer@oneillborges.com informing him of Ms. García Colón’s intention to request 

a lift of stay, as required in the “Sixteenth Amended Notice, Case Management and 

Administrative Procedures” Order in Civil N0. 17 - bk - 3283 (LTS). See also, Memorandum 

and Order, Exhibit 2, p. 5, n. 4. The email included copy of the Verified Complaint, Chief 

Judge Arias’ Memorandum and Order (Exhibit 2) granting the stay and a draft of the Motion 

for Lift of Stay. Exhibit 8. 

32. On that same date, Ms. García-Colón sent a letter to counsel for the CSIF informing them of 

the email to Mr. Bauer, that a copy of the email to Mr. Bauer would be forwarded to them, her 

intention to request a lift of stay and requesting that they:

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suggest two or three dates and times when the conversation may be had. If no 

response to this request is received during the next seven days, that is by 

August 25, 2022, plaintiff will interpret this as a refusal to meet and confer. 

The 15-day “Lift Stay Notice” expires on August 31, 2022, that is fifteen days 

after the email to Mr. Bauer.

Exhibit 9.

33. On August 22, 2022, counsel for CSIF responded to García-Colón’s request for an opportunity 

to meet and confer regarding the lift of stay. See, Exhibit 10. In their communication, the CSIF 

responded that it would not change its posture regarding the request for lift of stay and, should 

García insist and file it, it would be timely contested. See, Exhibit 10, Email from CSIF Re: 

Meet and Confer.

34. Notwithstanding the CSIF’s expressed position, on September 15 the undersigned spoke with 

the CSIF, through its counsel, Peter W. Miller, Esq. to inquire if there had been any change in 

the CSIF’s position regarding the lift of stay, but he notified the undersigned that it would stand 

by the position expressed by his co-counsel, Myriam Ocasio Arana, in her email of August 22,

2022. Exhibit 10. 

35. Accordingly, Ms. García-Colón respectfully certifies that she has fully complied with all

preliminary requirements for the filing of the instant Motion for Lift of Stay, as provided in 

the “Sixteenth Amended Notice, Case Management and Administrative Procedures” Order in 

Civil N0. 17 - bk - 3283 (LTS) and Chief Judge Arias’ Memorandum and Order (DE 86), 

Exhibit 2, p. 5, n. 4.

WHEREFORE, it is respectfully requested that the court GRANT this motion and, 

consequently, lift the stay in Civil No. 21-1211 (RAM), so that Ms. Keila García-Colón may

proceed with the prosecution of her claims against the CSIF without any bankruptcy-related 

limitations, together with any other remedy the Court may deem just and proper.

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I HEREBY CERTIFY that today this document was filed electronically and that an 

Informative Motion will be filed on this same date, including copy of the instant motion, in 

García Colón v. Corporation of the State Insurance Fund, Civil No. 21-1211 (RAM) through the

District Court’s CM/ECF system which will send notification to the parties through their attorneys

at their registered email addresses.

RESPECTFULLY SUBMITTED.

In San Juan, Puerto Rico, on September 23, 2022.

GONZALEZ MUÑOZ LAW OFFICES, PSC

P.O. Box 9024055

San Juan, PR 00902-4055

Tel. 787-766-5052

info@gonzalezmunozlaw.com

jgonzalez@gonzalezmunozlaw.com

s/ Juan Rafael González Muñoz

Juan Rafael González Muñoz

USDC-PR No. 202312

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