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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.,

Debtors.1

PROMESA

Title III

No. 17 BK 3283-LTS

(Jointly Administered)

In re:

THE FINANCIAL OVERSIGHT AND 

MANAGEMENT BOARD FOR PUERTO RICO,

as representative of

PUERTO RICO ELECTRIC POWER

AUTHORITY,

Debtors.

PROMESA

Title III

No. 17 BK 4780-LTS

NOTICE OF MEDIATION TEAM’S PROPOSED AMENDED ORDER

ESTABLISHING TERMS AND CONDITIONS OF MEDIATION

To the Honorable United States District Judge Laura Taylor Swain:

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 

(“Commonwealth”) (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).

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PLEASE TAKE NOTICE that, as directed by the Court’s September 20, 2022 Order 

Concerning Continuation of PREPA Mediation,2 the Mediation Team comprising Honorable 

Shelley C. Chapman as lead mediator, Honorable Robert D. Drain, and Honorable Brendan L. 

Shannon has filed its Proposed Amended Order Establishing the Terms and Conditions of 

Mediation (the Proposed Amended Terms and Conditions Order”).3

PLEASE TAKE FURTHER NOTICE that Paragraph 3 of the Proposed Amended Terms 

and Conditions Order proposes a revised schedule for the Mediation that proceeds in parallel

with the Court’s schedule for the consideration of various litigation issues that had been stayed 

pending the prior conduct of the Mediation. It also proposes, however, that the Mediation Team 

may seek a pause in such litigation schedule if warranted to materially enhance the prospects of 

successful Mediation. 

PLEASE TAKE FURTHER NOTICE THAT, recognizing that the litigation schedule is 

of direct importance to the conduct of the Mediation, although also subject to other 

considerations that are beyond the Mediation Team’s remit, the Mediation Team believes that 

the prospects of a successful Mediation will be greatly enhanced if the litigation schedule 

adopted by the Court provides for (a) the Oversight Board’s filing within 60 days a proposed 

plan of adjustment and related disclosure statement that contemplates alternative plan treatment 

depending on the outcome of the primary lien and claim disputes (a “Toggle Plan”), (b) the 

litigation of those disputes in the context of the Oversight Board’s request for confirmation of 

2 Case No. 17-03283, Docket No. 22313; Case No. 17-04780, Docket No. 2987. 3 Capitalized terms not otherwise defined herein have the meaning ascribed to the in the Proposed Amended Terms 

and Conditions Order.

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the Toggle Plan, and (c) a hearing on the Oversight Board’s request to confirm the Toggle Plan, 

consistent with an expedited litigation schedule, to be held no later than June, 2023.4 

PLEASE TAKE FURTHER NOTICE THAT the Mediation Team understands that such 

a timetable, and the simultaneous conduct of the Mediation, will require extensive work, 

including, as recommended in the Proposed Amended Terms and Conditions Order, additional 

financial advisor assistance to the Oversight Board. However, the Mediation Team believes 

that focusing the Mediation Parties on a schedule for PREPA’s actual emergence as promptly as 

practicable from this Title III Case provides a critically important context to the Mediation.

PLEASE TAKE FURTHER NOTICE THAT the Mediation Team is of course available 

to answer the Court’s questions.

Dated: September 22, 2022

Respectfully submitted: /s/ Shelley C. Chapman

SHELLEY C. CHAPMAN

United States Bankruptcy Judge

/s/ Robert D. Drain

ROBERT D. DRAIN

United States Bankruptcy Judge

/s/ Brendan L. Shannon

BRENDAN L. SHANNON

United States Bankruptcy Judge

4 As stated in the Mediation Report, the Mediation Team believes that the prompt negotiation of the issues 

preventing PREPA’s emergence from bankruptcy, rather than their litigation to conclusion, would greatly benefit 

Mediation Parties, including the Commonwealth. However, if litigation is to proceed, the Mediation Team 

believes that scheduling only two litigation issues – the “non-recourse” and dismissal/lift stay/receiver disputes –

for consideration before a hearing on confirmation of a Toggle Plan might further such negotiations, while all other 

issues should be heard in the context of confirmation or thereafter.

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