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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, et al.,

Debtors.1

PROMESA

Title III

No. 17 BK 3283-LTS

In re:

The Financial Oversight and Management Board 

for Puerto Rico,

as representative of

The Puerto Rico Electric Power Authority,

Debtor.

No. 17 BK 4780-LTS

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 Public Buildings Authority (“PBA”) (Bankruptcy Case No. 19 BK 5523-LTS) (Last Four 

Digits of Federal Tax ID: 3801); and (vi) Puerto Rico Electric Power Authority (“PREPA”) (Bankruptcy Case No. 17 

BK 4780-LTS) (Last Four Digits of Federal Tax ID: 3747).

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PRECAUTIONARY OBJECTION AND RESERVATION OF RIGHTS OF

U.S. BANK NATIONAL ASSOCIATION AS PREPA BOND TRUSTEE

TO PREPA’S URGENT MOTION FOR ORDER 

(I) SCHEDULING A HEARING TO CONSIDER THE ADEQUACY OF INFORMATION 

CONTAINED IN THE DISCLOSURE STATEMENT, (II) ESTABLISHING DEADLINE 

FOR FILING OBJECTIONS TO THE DISCLOSURE STATEMENT AND REPLIES 

THERETO, (III) APPROVING FORM AND MANNER OF NOTICE THEREOF, 

(IV) ESTABLISHING DOCUMENT DEPOSITORY PROCEDURES IN CONNECTION 

THEREWITH, AND (V) GRANTING RELATED RELIEF [ECF NO. 3112]

U.S. Bank National Association, in its capacity as PREPA Bond Trustee (solely in such 

capacity, the “PREPA Bond Trustee”), respectfully submits this Precautionary Objection and 

Reservation of Rights (“Precautionary Objection”) to the Urgent Motion of Puerto Rico Electric 

Power Authority for Order (I) Scheduling a Hearing to Consider the Adequacy of Information 

Contained in the Disclosure Statement, (II) Establishing the Deadline for Filing Objections to the 

Disclosure Statement and Replies Thereto, (III) Approving the Form and Manner of Notice 

Thereof, (IV) Establishing Document Depository Procedures in Connection Therewith, and 

(V) Granting Related Relief [ECF No. 3112] (the “Scheduling Motion”).

2

In support of its

Precautionary Objection, the PREPA Bond Trustee states as follows:

1. The PREPA Bond Trustee submits this Precautionary Objection for the limited 

purpose of ensuring that the scope of relief the Court is addressing in this Scheduling Motion

cannot be misconstrued going forward. Specifically, the PREPA Bond Trustee requests 

confirmation that the Court—in granting any relief sought in the Scheduling Motion—has not been 

asked to and is not approving, disapproving, or otherwise ruling on any aspect of the settlement 

offer solicitation process the Financial Oversight and Management Board for Puerto Rico (the 

2 Capitalized terms used herein but not otherwise defined will have the meaning ascribed to them in the

Scheduling Motion.

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“Oversight Board”) has indicated it intends to initiate with all PREPA Bondholders to be launched 

through DTC on or around December 28, 2020. 

2. This process (the “Exchange Offer Process”) is referenced on pages 2-3 and 40-41 

of the proposed Disclosure Statement for Title III Plan of Adjustment of the Puerto Rico Electric 

Power Authority [ECF No. 3111] (the “Disclosure Statement”). The Oversight Board describes 

the Exchange Offer Process as follows: 

In order to allow holders of PREPA Revenue Bond Claims and 

Assured Insured Interest Rate Swap Claims to settle their Claims 

against PREPA, the Oversight Board will provide each such holder 

with the opportunity to sign a plan support agreement by the 

expiration of the Exchange Offer Period (as defined below), 

pursuant to which such holder can agree to be treated as a Settling 

Bondholder or Settling Monoline, as appropriate, pursuant to the 

Plan. Any signing claimholder shall receive a contra-CUSIP in 

exchange for their current holdings. Any holder that does not sign 

and deliver the plan support agreement shall be treated as a NonSettling Bondholder or Non-Settling Monoline, as appropriate, and 

will not be able to join the Settling Bondholder and Settling 

Monoline Class, unless the Oversight Board agrees to extend such 

deadline, but in no event will such deadline be extended after a 

ruling by the Title III Court on the Amended Lien & Recourse 

Challenge.

The Oversight Board intends to commence the period within which 

the holders of PREPA Revenue Bond Claims and Assured Insured 

Interest Rate Swap Claims can sign the plan support agreement (the 

“Exchange Offer Period”) on or around December 28, 2022, with 

the Exchange Offer Period concluding on or around February 15, 

2023. Each eligible holder will receive both the plan support 

agreement and a corresponding settlement offer memorandum, 

explaining, among other things, the proposed treatment of such 

holder’s Claims if the holder signs the plan support agreement. Any 

failure to deliver the signed restructuring support agreement prior to 

the expiration of the Exchange Offer Period will prevent from such 

holder opting into the settlement class and will prevent from such 

holder receiving the treatment that such class will receive if the 

Disclosure Statement is approved and the Plan is confirmed.

(Disclosure Statement 40-41.)

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3. To date, the Oversight Board has not provided the PREPA Bond Trustee with any 

further information about the Exchange Offer Process beyond that contained in the plan-related 

materials submitted on December 16, 2022. To date, the Oversight Board has neither sought nor 

obtained the PREPA Bond Trustee’s consent regarding any aspect of the Exchange Offer Process. 

4. Neither the Scheduling Motion nor the Proposed Order submitted as Exhibit A

thereto expressly reference the Exchange Offer Process or ask the Court to provide any relief 

relating thereto. 

5. Nevertheless, to avoid any potential misunderstanding (including by third parties) 

about the scope of the Court’s order approving the Scheduling Motion and to protect the rights of 

all parties concerned, the PREPA Bond Trustee requests that any order the Court may issue in 

response to the Scheduling Motion contain the following language: 

Scope of Order. In its Motion, the Board has not asked that the 

Court consider or authorize any settlement offer to Holders of 

PREPA Revenue Bond Claims as described in the Disclosure 

Statement [ECF No. 3111 at 40-41], and nothing in this Order shall 

be construed to authorize or deny authorization with respect to any 

such settlement offer, and no rights or remedies of any person or 

entity with respect thereto are limited hereby. 

6. Prior to the submission of this Objection, counsel for the PREPA Bond Trustee 

contacted counsel for the Oversight Board to request that the Scheduling Motion’s proposed order 

be amended to include the language referenced in Paragraph 5. The Oversight Board responded 

that such language was not necessary, and while the PREPA Bond Trustee agrees that it should be 

clear that any order regarding the Oversight’s Board Scheduling Motion does not address the 

Exchange Offer Process, the PREPA Bond Trustee nonetheless makes this request out of an 

abundance of caution.

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RESERVATION OF RIGHTS

7. The PREPA Bond Trustee reserves any and all rights concerning the Exchange 

Offer Process, including the right to object to the timing, method, substance, and effect of any 

settlement offer extended to PREPA Bondholders pursuant to the Exchange Offer Process. 

RESPECTFULLY SUBMITTED, in San Juan, Puerto Rico, December 21, 2022.

WE HEREBY CERTIFY that on this same date a true and exact copy of this motion was filed 

with the Clerk of Court using the CM/ECF system, which will notify a copy to counsel of record. 

RIVERA, TULLA AND FERRER, 

LLC

By: /s/ Eric A. Tulla 

Eric A. Tulla

USDC-DPR No. 118313

Email: etulla@ riveratulla.com

Rivera Tulla & Ferrer Building

50 Quisqueya Street

San Juan, PR 00917-1212

Tel: (787)753-0438

Fax: (787)767-5784 (787)766-0409

MASLON LLP

By: /s/Clark T. Whitmore 

Clark T. Whitmore (admitted pro hac vice)

Michael C. McCarthy (admitted pro hac vice)

John T. Duffey (admitted pro hac vice)

Jason M. Reed (admitted pro hac vice)

90 South Seventh Street, Suite 3300

Minneapolis, MN 55402

Telephone: 612-672-8200

Facsimile: 612-672-8397

E-Mail: clark.whitmore@maslon.com

 michael.mccarthy@maslon.com

john.duffey@maslon.com

 jason.reed@maslon.com

 

ATTORNEYS FOR U.S. BANK NATIONAL 

ASSOCIATION, IN ITS CAPACITY AS 

PREPA BOND TRUSTEE

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