UNITED STATES DISTRICT COURT 

FOR THE DISTRICT OF PUERTO RICO 

In re 

) 

) 

PROMESA Title III 

THE FINANCIAL OVERSIGHT AND 

MANAGEMENT BOARD FOR PUERTO RICO, 

) 

) 

) 

No. 17 BK- 3283-LTS 

(Jointly Administered) 

As a representative of 

THE COMMONWEALTH OF PUERTO RICO

et al., 

Debtors.1

) 

) 

RE: Dkt Nos. 22442 and 22461 in Case 

No. 17-3283 

 

In re 

) 

) 

PROMESA Title III 

THE FINANCIAL OVERSIGHT AND 

MANAGEMENT BOARD FOR PUERTO RICO, 

As a representative of 

) 

) 

) 

) 

PUERTO RICO ELECTRIC POWER 

AUTHORITY, 

Debtor. 

) 

) 

) 

No. 17 BK-4780-LTS 

FEE EXAMINER’S COMMENT CONCERNING APPLICATION OF OVERSIGHT 

BOARD FOR ENTRY OF ORDER (I) RATIFYING CONTINUED APPOINTMENT OF 

LEAD MEDIATIOR AND (II) APPOINTING WILLKIE FARR & GALLAGHER LLP 

AS SPECIAL ADVISOR TO THE LEAD MEDIATOR 

To provide the Court with context, the Fee Examiner, by his counsel, submits this 

comment on the pending Application of Oversight Board for Entry of Order (i) Ratifying 

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); and, (v) Puerto Rico Electric Power Authority (“PREPA”) (Bankruptcy Case 

No. 17 BK 4780-LTS) (Last Four Digits of Federal Tax ID: 3747) 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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Continued Appointment of Lead Mediator and (ii) Appointing Willkie Farr & Gallagher LLP as 

Special Advisor to the Lead Mediator [Dkt. No. 22442 in Case No. 17-BK-3283 and Dkt No. 

3018 in Case No. 17-BK-4780] (the “Application”) -- pursuant to the Order Scheduling Briefing 

Concerning Application of Oversight Board for Entry of Order (i) Ratifying Continued 

Appointment of Lead Mediator and (ii) Appointing Willkie Farr & Gallagher LLP as Special 

Advisor to the Lead Mediator [Dkt. No. 22461 in Case No. 17-BK-3283 and Dkt No. 3020 in 

Case No. 17-BK-4780]. 

PRIOR WF&G RETENTION 

1. Willkie Farr & Gallagher LLP (“WF&G”) has previously provided services in 

these proceedings as counsel to Bettina M. Whyte, as the COFINA Agent. In connection with 

that retention, it filed five interim fee applications pursuant to sections 316 and 317 of the Puerto 

Rico Oversight, Management, and Economic Stability Act (“PROMESA”), and the Court’s prior 

interim compensation orders. See [Dkt. Nos. 2031, 2727, 3541, 4263, and 5782 in Case No. 17-

BK-3283]. 

2. On February 2, 2018, the Fee Examiner and WF&G filed the Stipulated 

Disclosure Agreement and Protective Order [Dkt. No. 2389 in Case No. 17-BK-3283]. 

3. On April 2, 2018, the Court entered the Stipulated Disclosure Agreement and 

Protective Order [Dkt. No. 2832 in Case No. 17-BK-3283, at p. 6] (the “Fee Examiner

Protective Order”) stating, “This Stipulated Disclosure Agreement and Protective Order, once 

executed and entered by the Court, shall be deemed to incorporate and shall govern each 

Stipulated Disclosure Agreement and Protective Order in the form hereof that is executed on 

behalf of the Fee Examiner and one or more parties in interest and is filed on, before or after this 

date on the ECF system in the above-captioned jointly administered cases.” 

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4. On June 12, 2019, WF&G filed the Final Fee Application of Willkie Farr & 

Gallagher LLP, in its Capacity as Counsel to Bettina M. Whyte, as the COFINA Agent, for Final 

Allowance of Compensation for Services Rendered and Reimbursement of Expenses Incurred 

from August 3, 2017 Through February 12, 2019. [Dkt. No. 7409 in Case No. 17-BK-3283]. 

5. On October 29, 2019, the Court entered the Omnibus Order Awarding Final 

Allowance of Compensation for Professional Services Rendered and Reimbursement of 

Expenses for COFINA Final Fee Period [Dkt. No. 9047 in Case No. 17-BK-3283 and Dkt. No. 

687 in Case No. 17-BK-3284], awarding WF&G $14,132,358.18 in fees and $1,232,803.23 in 

expenses as final compensation for its work on behalf of the COFINA Agent. The blended rate 

in the final WF&G fee application for all attorneys (prior to a five percent discount) was 

$934.54. See [Dkt. No. 7409 in Case No. 17-BK-3283] (the “WF&G Final COFINA Fee 

Application”) at summary sheet page 2. 

PRIOR PROFESSIONAL RETENTIONS FOR MEDIATION TEAMS 

6. On August 21, 2017, the Court authorized the retention of Phoenix Management 

Services LLC (“Phoenix”) to advise Hon. Barbara Houser (the “Commonwealth Mediation 

Team Leader”) and the mediation team in the Title III Commonwealth case [Dkt. No. 1100 in 

Case No. 17-BK-3283 and Dkt. No. 246 in Case No. 17-BK-4780] (the “Phoenix Retention 

Order”). The Phoenix Retention Order required Phoenix to file fee applications “under the 

procedures and standards applicable to fees and expenses of professional persons under 

PROMESA section 316” and “subject to any interim compensation orders entered by the Court, 

except that any objection to the allocation of Phoenix’s fees and expenses or the reasonableness 

of those fees and expenses shall be raised in the first instance with the [Commonwealth] 

Mediation Team Leader.” ¶ 5. 

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7. Phoenix has submitted 14 applications for interim compensation—all complying 

with the operative interim compensation order. The Court has approved 13 of the Phoenix 

applications without objection throughout the course of these proceedings, with the 14th

scheduled for Fee Examiner recommendation and Court approval in connection with the 

November 2, 2022 Omnibus Hearing. 

8. On June 23, 2022, the Court authorized the retention of Moelis & Company LLC 

(“Moelis”) as financial advisor to the PREPA mediation team (the “PREPA Mediation Team”) 

with the fees and expenses of Moelis “subject to review and allowance by the Court under the 

procedures and standards applicable to fees and expenses of professional persons under 

PROMESA” sections 316 and 317. See Order Authorizing Employment and Retention of Moelis 

& Company LLC, as Financial Advisor for Mediation Team [Dkt. No. 2859 in Case No. 17-BK4780] (the “Moelis Retention Order”) at ¶ 4. 

9. The Moelis Retention Order further provides that “Moelis restructuring 

professionals shall be required only to keep summary time records in hourly increments, Moelis’ 

non-restructuring professionals and personnel in administrative departments (including legal) 

shall not be required to keep time records, Moelis’ professionals shall not be required to keep 

time records on a project category basis and Moelis shall not be required to provide or conform 

to any schedule of hourly rates.” Id., ¶ 5. 

10. On September 12, 2022, Moelis submitted its first application for compensation 

[Dkt. No. 22153 in Case No. 17-BK-3283 and Dkt. No. 2952 in Case No. 17-BK-4780] that, on 

initial review, appears to conform to the Order’s requirements. 

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11. Neither the Phoenix nor Moelis Retention Orders imposed any record-keeping or 

reporting requirements on any member of the PREPA Mediation Team or the Commonwealth 

Mediation Team. 

PROPOSED WF&G RETENTION 

12. On October 3, 2022, the Oversight Board filed the Application, seeking Court 

approval of the continued appointment of the PREPA Lead Mediator and appointing WF&G as 

“special advisor” to the PREPA Lead Mediator “to assist the Lead Mediator in the performance 

of her duties in the PREPA case.” Application, ¶ 12. 

13. The Application stipulates that WF&G “will perform such services...as requested 

by the Lead Mediator...,” including the services of Jamie Eisen, also joining WF&G as counsel. 

Id., ¶ 16. 

14. In compensation for their services, the Lead Mediator and WF&G collectively 

will be paid $50,000 each month by PREPA “without need for the filing of any reports.” Id., ¶ 

22. 

15. The Application also provides for the payment of any “reasonable and necessary” 

costs and expenses and requires WF&G to “maintain records in support” of those costs and 

expenses. Id., ¶ 23. 

16. The Application requests that WF&G professionals who assist the Lead Mediator 

“not be required to maintain any time records,” requesting as well that the Court “waive [any] 

such requirements” for detailed time records.” Id., ¶ 24. 

17. As the Court knows, several financial and advisory firms in the Title III 

proceedings file compensation applications that do not strictly adhere to Appendix B of the U.S. 

Trustee’s Guidelines for Reviewing Applications for Compensation and Reimbursement of 

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Expenses Filed Under 11 U.S.C. §330 by Attorneys in Large Chapter 11 Cases Effective as of 

November 1, 2013 (the “U.S. Trustee Guidelines”). In Chapter 11 cases, the U.S. Trustee 

Guidelines apply only to attorneys, although the interim compensation order here requires all 

professionals in the Title III cases to comply with the guidelines. See Third Amended Order 

Setting Procedures for Interim and Final Compensation and Reimbursement of Expenses of 

Professionals [Dkt. No. 20546 in Case No. 17-BK-3283] at ¶3(j). 

18. Even Title III professionals that have been granted limited and particularized 

exceptions to the usual bankruptcy billing norms (none of which are law firms) file fee 

applications subject to the Fee Examiner’s review and recommendation and the Court’s review 

and approval. The Application provides no basis for exempting timekeepers at WF&G (other 

than the PREPA Mediation Team members themselves) from the fee application process. 

19. Though the Oversight Board’s engagements with all other retained professionals 

in the Title III cases are set forth in an engagement agreement or letter, generally accessible on 

the Oversight Board’s website (https://oversightboard.pr.gov/documents/), no agreement appears 

for WF&G. WF&G has not disclosed its customary billing rates, though such -- now dated -- 

information appears in the record in connection with WF&G’s COFINA engagement and 

compensation. 

20. To the extent parties are appropriately concerned about mediation confidentiality, 

a renewed agreement on the applicability of the Fee Examiner Protective Order could address 

such a concern. 

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CONCLUSION 

With this comment, the Fee Examiner does not intend to take a position on the pending 

Application; rather, he provides the additional factual and procedural background to supplement 

the record regarding WF&G’s engagement and compensation proposal through the Application. 

Dated October 6, 2022 

EDGE Legal Strategies, PSC 

 s/ Eyck O. Lugo ___________________________ 

Eyck O. Lugo 

252 Ponce de León Avenue 

Citibank Tower, 12th Floor 

San Juan, PR 00918 

Telephone: (787) 522-2000 

Facsimile: (787) 522-2010 

Puerto Rico Counsel for Fee Examiner 

GODFREY & KAHN, S.C. 

One East Main Street, Suite 500 

Madison, WI 53703 

Telephone: (608) 257-3911 

Facsimile: (608) 257-0609 

Katherine Stadler (Pro Hac Vice) 

Counsel for the Fee Examiner 

28018989.3 

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