Hearing Date: December 14, 2022 at 9:30AM (Atlantic Standard Time)

 Objection Deadline: November 29, 2022 at 4:00PM (Atlantic Standard Time)

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

(Jointly Administered)

NOTICE OF MOTION OF THE FINANCIAL OVERSIGHT AND MANAGEMENT 

BOARD FOR PUERTO RICO TO AMEND 

ALTERNATIVE DISPUTE RESOLUTION PROCEDURES 

 

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-BK3567-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).

Case:17-03283-LTS Doc#:22899 Filed:11/22/22 Entered:11/22/22 12:40:05 Desc: Main

Document Page 1 of 27
 

1

PLEASE TAKE NOTICE that, upon the accompanying Motion of the Financial 

Oversight and Management Board for Puerto Rico to Amend Alternative Dispute Resolution 

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

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

“Commonwealth”), the Puerto Rico Highways and Transportation Authority (“HTA”), the 

Employees Retirement System of the Government of the Commonwealth of Puerto Rico (“ERS”), 

the Puerto Rico Electric Power Authority (“PREPA”), and the Puerto Rico Public Buildings 

Authority (“PBA,” and together with the Commonwealth, HTA, ERS, and PREPA, the “Debtors”) 

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

Act (“PROMESA”),2 will move this Court on December 14, 2022 at 9:30 AM (AST), or as soon 

thereafter as counsel may be heard, before the Honorable Laura Taylor Swain, United States 

District Judge, for an order granting the relief requested in the Motion.

PLEASE TAKE FURTHER NOTICE that any objection to the Motion shall conform to 

the Federal Rules of Bankruptcy Procedure and the Local Bankruptcy Rules for the District of 

Puerto Rico, shall be filed with the Court (a) by attorneys practicing before the Court in the 

Debtors’ Title III cases, including attorneys admitted pro hac vice, electronically in accordance 

with Rule 5 of the Local Rules for the District of Puerto Rico, and (b) by all other parties in interest, 

by submitting a hard copy via mail to the Clerk’s Office, United States District Court, 150 Carlos 

Chardón Avenue, Room 150, San Juan, PR 00918, to the extent applicable, and shall be served on 

the Debtors through their undersigned counsel in accordance with the Sixteenth Amended Case 

 

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

Case:17-03283-LTS Doc#:22899 Filed:11/22/22 Entered:11/22/22 12:40:05 Desc: Main

Document Page 2 of 27
 

2

Management Procedures (the “Case Management Procedures”) [ECF No. 20190-1], so as to be 

filed and received no later than November 29, 2022 at 4:00 PM (AST). The relief requested may 

be granted without hearing if no objection is timely filed and served in accordance with the Case 

Management Procedures. 

PLEASE TAKE FURTHER NOTICE that, in accordance with the Court’s standing 

orders and the Case Management Procedures, the Debtors have provided notice of this Motion, in 

the form of paper copies thereof sent by first class mail or digital copies sent by email, to (a) all 

creditors who filed proofs of claim which have yet to be reconciled, (b) the U.S. Trustee, (c) all

creditors who filed notices of correspondence, and (d) the Master Service List (as defined in the 

Case Management Procedures), which is available on the Debtors’ case website at 

https://cases.ra.kroll.com/puertorico. The Debtors submit that, in light of the nature of the relief 

requested, no other or further notice need be given.

Case:17-03283-LTS Doc#:22899 Filed:11/22/22 Entered:11/22/22 12:40:05 Desc: Main

Document Page 3 of 27
 

3

Dated: November 22, 2022

San Juan, Puerto Rico

Respectfully submitted,

/s/ Brian S. Rosen 

Martin J. Bienenstock

Brian S. Rosen 

(Admission 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 

Debtors

/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 

Debtors

Case:17-03283-LTS Doc#:22899 Filed:11/22/22 Entered:11/22/22 12:40:05 Desc: Main

Document Page 4 of 27
 

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

(Jointly Administered)

MOTION OF THE FINANCIAL OVERSIGHT AND MANAGEMENT BOARD FOR 

PUERTO RICO TO AMEND ALTERNATIVE DISPUTE RESOLUTION PROCEDURES 

 

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-BK3567-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).

Case:17-03283-LTS Doc#:22899 Filed:11/22/22 Entered:11/22/22 12:40:05 Desc: Main

Document Page 5 of 27
 

1

To the Honorable United States District Judge Laura Taylor Swain:

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

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

the Puerto Rico Highways and Transportation Authority (“HTA”), the Employees Retirement 

System of the Government of the Commonwealth of Puerto Rico (“ERS”), the Puerto Rico Electric 

Power Authority (“PREPA”), and the Puerto Rico Public Buildings Authority (“PBA,” and 

together with the Commonwealth, HTA, ERS, and PREPA, the “Debtors”) pursuant to Section 

315(b) of the Puerto Rico Oversight, Management, and Economic Stability Act (“PROMESA”),2

respectfully submits this motion (the “Motion”) for entry of an order, substantially in the form 

attached hereto as Exhibit A (the “Proposed Order”), amending Exhibit 1 (the “ADR 

Procedures”)3 to the Order (A) Authorizing Alternative Dispute Resolution Procedures, (B) 

Approving Additional Form of Notice, and (C) Granting Related Relief [ECF No. 12576] (the 

“ADR Order”). In support of the Motion, the Debtors respectfully state as follows:

BACKGROUND

A. The Debtors’ Initial and Amended Motions for Entry of the ADR Order

1. On June 5, 2019, the Debtors submitted the Motion for Entry of an Order (A) 

Authorizing Alternative Dispute Resolution Procedures, (B) Approving Additional Forms of 

Notice, (C) Approving Proposed Mailing, and (D) Granting Related Relief [ECF No. 7224] (the 

 

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

3 Section 7 of the ADR Procedures was amended by the Court’s Order Amending Alternative Dispute Resolution 

Procedures [ECF No. 15505], dated December 29, 2020 (the “Order Amending ADR Procedures”). As used herein, 

the term “ADR Procedures” shall refer to and incorporate the amendments set forth in the Order Amending ADR 

Procedures.

Case:17-03283-LTS Doc#:22899 Filed:11/22/22 Entered:11/22/22 12:40:05 Desc: Main

Document Page 6 of 27
 

2

“Initial ADR Motion”), wherein the Debtors sought entry of an order authorizing alternative 

dispute resolution procedures to “promote the efficient, timely, and cost-effective resolution of” 

certain general unsecured claims. Id. at 5. The proposed procedures: (a) truncated the discovery 

process with respect to disputed claims, (b) provided a mechanism and timetable for the exchange 

of offers to compromise and settle claims, and (c) in the absence of a settlement, set forth a 

litigation structure which would lead to the expeditious submission and determination of disputed 

claims. Id.

2. The Initial ADR Motion was considered by the Court at an omnibus hearing on July

24, 2019. At the hearing, the Court requested certain modifications to the Initial ADR Motion, 

and, by order, dated August 13, 2019, the Court adjourned consideration of the Initial ADR Motion 

pending the submission of revised proposed procedures and forms of notice consistent with the 

Court’s guidance. Order Granting in Part and Adjourning in Part Debtors’ Motion for Entry of 

An Order (A) Authorizing Alternative Dispute Resolution Procedures, (B) Approving Additional 

Forms of Notice, (C) Approving Proposed Mailing, and (D) Granting Related Relief [ECF No. 

8453].

3. On January 7, 2020, the Debtors filed the Amended Motion for Entry of an Order 

(a) Authorizing Alternative Dispute Resolution Procedures, (b) Approving Additional Forms of 

Notice, and (c) Granting Related Relief [ECF No. 9718] (the “Amended ADR Motion”), which 

incorporated the Court’s rulings and the statements made on the record at the July 24, 2019 

omnibus hearing, as well as included the input and suggestions of numerous parties in interest. 

See generally id. The Amended ADR Motion proposed revised procedures which: (a) provided a 

mechanism and timetable for the exchange of offers to compromise and settle claims, (b) provided 

Case:17-03283-LTS Doc#:22899 Filed:11/22/22 Entered:11/22/22 12:40:05 Desc: Main

Document Page 7 of 27
 

3

robust mediation procedures designed to promote out-of-court resolution of claims, and (c) in the 

absence of a settlement or successful resolution through alternative dispute mechanisms, permitted 

the parties to, upon consent, submit the claims either to litigation in the Commonwealth courts or 

to binding arbitration. Id. at 6-7.

B. The ADR Order and Subsequent Resolution of Claims Pursuant to The ADR

Procedures

4. On April 1, 2020, the Court entered the ADR Order granting the Amended ADR 

Motion, authorizing the Debtors to “take any and all actions reasonably necessary or appropriate 

to effectuate the relief granted pursuant to this Order in accordance with the [Amended ADR]

Motion,” and retaining exclusive jurisdiction with respect to all matters arising from or related to 

the implementation, interpretation, and enforcement of the Order. ADR Order at 2-3.

5. Since the Court’s entry of the ADR Order, the Debtors have filed twenty-seven

notices transferring proofs of claim into the ADR Procedures and have transferred approximately 

1,200 proofs of claim into the ADR Procedures. The Debtors also have filed status notices 

indicating that: five (5) proofs of claim were settled in Evaluative Mediation (as defined in the 

ADR Order); twenty-two (22) proofs of claim have been fully resolved; and approximately twelve 

(12) have accepted the Debtors’ offers. The status notices also have advised the Court that over 

five hundred proofs of claim are currently in the Offer-Exchange (as defined in the ADR Order) 

phase of the ADR Procedures, and the claimants associated with these claims have received either 

an Offer or an Information Request (as defined in the ADR Order).

6. To date, the Debtors have filed several omnibus objections to address claims 

associated with claimants who either did not respond to Information Requests or provided 

incomplete responses to Information Requests. See, e.g., Five Hundred Twenty-Eighth Omnibus 

Case:17-03283-LTS Doc#:22899 Filed:11/22/22 Entered:11/22/22 12:40:05 Desc: Main

Document Page 8 of 27
 

4

Objection (Substantive) of the Commonwealth of Puerto Rico, the Employees Retirement System 

of the Government of the Commonwealth of Puerto Rico and the Puerto Rico Highways and 

Transportation Authority to Deficient ADR Claims[ECF No. 22260]. Each omnibus objection has 

been accompanied by a corresponding notice of removal to remove claims subject to the objection

from ADR. See, e.g., Notice of Removal of Certain Claims form Alternative Dispute Resolution 

and Administrative Claims Reconciliation [ECF No. 22238]. 

C. Administrative Expense Claims

7. 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”), and, 

among other things, approving in all respects the Effective Date Notice (as defined below), 

establishing the method for service of such notice pursuant to decretal paragraph 94 of the 

Confirmation Order, and determining that such service “shall be deemed good and sufficient notice 

of entry of [the Confirmation Order].” Confirmation Order ¶ 94. 

8. On March 15, 2022, the Plan was substantially consummated. See Notice of (A) 

Entry of Order Confirming Modified Eighth Amended Title III Plan of Adjustment of the 

Commonwealth of Puerto Rico, et al. Pursuant to Title III of PROMESA and (B) Occurrence of 

the Effective Date [ECF No. 20349] (the “Effective Date Notice”). Pursuant to Section 1.51 and 

Article III of the Plan and decretal paragraph 44 of the Confirmation Order, the deadline for filing 

Case:17-03283-LTS Doc#:22899 Filed:11/22/22 Entered:11/22/22 12:40:05 Desc: Main

Document Page 9 of 27
 

5

proofs of Administrative Expense Claims (as defined in the Plan) was ninety (90) days after the 

Effective Date or June 13, 2022 (the “Administrative Claim Bar Date”). Id. at 2.

9. In accordance with the service requirements set forth in decretal paragraph 94 of 

the Confirmation Order, the Debtors served the Effective Date Notice on all relevant parties.

10. The Effective Date Notice, among other things, informed parties of the 

Administrative Claim Bar Date, and noted:

[T]he deadline for filing proofs of or requests for payment of 

Administrative Expense Claims (“Administrative Expense 

Requests”) is June 13, 2022;

. . . 

Administrative Expense Requests will be deemed timely filed only 

if actually received by Prime Clerk by 5:00 p.m. (prevailing 

Atlantic Time) on June 13, 2022 (the “Administrative Deadline”). 

Id. (emphasis in original).

11. On June 13, 2022, Ivelisse Calderón-Alibrán and Carlos Torres Viada filed the 

Urgent Motion for Extension of Administrative Expense Claim Bar Date and Proper Service of 

Process and Request to be Heard [ECF No. 21217] (the “Extension Motion”), requesting, among 

other things, entry of an order extending the Administrative Claim Bar Date by 120 days and 

directing the publication notice of such extension. The Debtors filed a response to the Extension 

Motion on September 9, 2022. Response of the Financial Oversight and Management Board for 

Puerto Rico to Urgent Motion for Extension of Administrative Expense Claim Bar Date and 

Proper Service of Process Request to Be Heard [ECF No. 22130]. Briefing on the Extension 

Motion was completed on September 30, 2022. See Reply to Response of the Financial Oversight 

and Management Board for Puerto Rico to Urgent Motion for Extension of Administrative Expense 

Claim Bar Date and Proper Service of Process Request to Be Heard [ECF No. 22412].

Case:17-03283-LTS Doc#:22899 Filed:11/22/22 Entered:11/22/22 12:40:05 Desc: Main

Document Page 10 of 27
 

6

12. On October 10, 2022, the Court granted the Extension Motion in part and denied it 

in part. Order Extending Administrative Claim Bar Date for Certain Parties and Modifying 

Discharge Injunction [ECF No. 22650]. In the order, the Court extended the Administrative Claim 

Bar Date until 4:00 p.m. (Atlantic Standard Time) on January 18, 2023 (the “Extended 

Administrative Claim Bar Date”) solely with respect to any claim or cause of action:

(A)(1) asserted in a litigation or action against the Commonwealth, 

PBA, or ERS commenced from and after the respective petition date 

and prior to the Effective Date and relating to an action or event 

occurring from and after the respective petition date and prior to the

Effective Date, or (2) not subject to a pending litigation or action, 

but arising from actions or events occurring from or after the 

respective petition date and prior to the Effective Date, and

(B) the holder of such claim did not receive service of the Effective 

Date Notice as documented in a Certificate of Service referred to in 

paragraph 3 below.

Id. at 3 (emphasis in original).

13. To date, over 1,000 Administrative Expense Claims have been filed since the Plan’s 

Effective Date, bringing the total number of Administrative Expense Claims filed to over 14,000.

Through the reconciliation efforts of the Oversight Board and the Debtors, and the entry of 

numerous orders by the Court, over ninety percent (90%) of such requests have been disallowed 

and expunged, leaving approximately 1,400 outstanding asserted Administrative Expense Claims. 

With the Extended Administrative Claim Bar Date two months away, it is expected that additional 

claims will be filed.

RELIEF REQUESTED

14. By this Motion, the Debtors seek entry of the Proposed Order, amending the ADR

Procedures to allow the Debtors (a) to object to proofs of claim associated with claimants who 

Case:17-03283-LTS Doc#:22899 Filed:11/22/22 Entered:11/22/22 12:40:05 Desc: Main

Document Page 11 of 27
 

7

have not responded to offers or counteroffers served pursuant to the ADR Procedures; and (b) in 

their discretion, to transfer Administrative Expense Claims into the ADR Procedures. 

BASIS FOR RELIEF

15. Federal Rule of Civil Procedure 60(b)(6)—incorporated by reference in Federal 

Rule of Bankruptcy Procedure 9024, made applicable in the Title III context pursuant to 48 U.S.C. 

§ 2701—permits a party to seek to alter an order or judgment any time “for any other reason that 

justifies relief.” Fed. R. Civ. P. 60(b)(6). “Because Rule 60(b)(6) is a catch-all provision, its 

contours are peculiarly malleable. Thus, hard-and-fast rules generally are not compatible with 

Rule 60(b)(6) determinations.” Ungar v. Palestine Liberation Org., 599 F.3d 79, 84 (1st Cir. 2010) 

(citation omitted).

16. While “[t]he decision to grant or deny such relief is inherently equitable in nature” 

(id. at 83), courts within the First Circuit applying this rule typically assess: (1) the existence of 

exceptional circumstances justifying extraordinary relief; (2) the absence of unfair prejudice to 

opposing parties; and (3) timeliness. Bouret-Echevarria v. Caribbean Aviation Maint. Corp., 784 

F.3d 37, 43 (1st Cir. 2015). However, “‘[t]his compendium is neither exclusive nor rigidly applied. 

Rather, the listed factors are incorporated into a holistic appraisal of the circumstances’ ... [and] 

‘[s]ometimes one factor predominates to such an extent that it inexorably dictates the result.’” Id. 

(quoting Ungar, 599 F.3d at 83-84, 86).. 

17. Here, application of the factors compels allowance of the Debtors’ Motion.

A. Amendment of the ADR Procedures Meets the First Factor

18. The first factor—the existence of exceptional circumstances justifying 

extraordinary relief—cuts in favor of amendment. This and other courts have recognized that, in 

Case:17-03283-LTS Doc#:22899 Filed:11/22/22 Entered:11/22/22 12:40:05 Desc: Main

Document Page 12 of 27
 

8

applying the first factor, there is “broad discretion” to determine whether such circumstances exist. 

See, e.g., Feliciano-Muñoz v. Rebarber-Ocasio, No. 16-2719, 2021 WL 3887680, at *2 (D.P.R. 

Mar. 23, 2021) (citation omitted); see also Brown v. Webber, No. 18-09618, 2022 WL 1124901, 

at *2 (S.D.N.Y. Apr. 14, 2022) (“The rule has been deemed a ‘grand reservoir of equitable power 

to do justice in a particular case’ and ‘confers broad discretion on the trial court to grant relief 

when appropriate.’” (citation omitted)).

19. In In re Lehman Brothers Holdings, Inc., the United States Bankruptcy Court for 

the Southern District of New York exercised its broad discretion to find that amendment of ADR 

procedures was appropriate under Federal Rule of Civil Procedure 60(b)(6) due to the accrual of 

certain types of claims that had not accrued when the bankruptcy court originally entered the order

approving said procedures. No. 08-13555 (Bankr. S.D.N.Y. Nov. 7, 2018) (ECF Nos. 59065, 

59066, 59067) (orders permitting amendment of ADR procedures to add certain indemnification 

claims within scope); see also id. (Bankr. S.D.N.Y. Oct. 1, 2018) (ECF No. 58858) (motion 

arguing for amendment of ADR procedures under Federal Rule of Civil Procedure 60(b)(6) to 

“add ... Indemnification Claims ... which had not accrued when the Court originally entered the 

ADR Order.”). 

20. As in Lehman Brothers, amendment of the ADR Procedures is justified here 

because of the accrual of certain claims that had not accrued when the ADR Order was first entered. 

More specifically, two categories of claims have accrued: (1) claims transferred into ADR 

associated with claimants who have not responded to offers or counteroffers, and (2) claims

asserting a possibly valid entitlement to administrative expense priority. Currently, there are 

dozens of claims in each of these categories. 

Case:17-03283-LTS Doc#:22899 Filed:11/22/22 Entered:11/22/22 12:40:05 Desc: Main

Document Page 13 of 27
 

9

21. At the time the ADR Order was entered, the Debtors did not anticipate that a large 

number of claimants would fail to respond to an offer or counteroffer. As such, the current ADR 

Procedures provide that claims associated with non-responsive claimants are deemed “rejections” 

requiring Evaluative Mediation. ADR Order, Ex. 1 §§ 2(f), 3(a). The Procedures further provide 

that, after a claim enters Evaluative Mediation, both the Debtors and the claimant must file 

mediation statements before the assigned mediator. Id. § 3(c). In addition to a mediation 

statement, the Debtors are required under the Procedures to provide all history of back-and-forth 

with the claimant. Id. 

22. If claims associated with non-responsive claimants were to enter Evaluative 

Mediation, there would be at least two issues. First, a claimant who has not responded to an offer 

or counteroffer is not likely to submit a mediation statement. Further, there is no substantive

history of back-and-forth for a mediator to consider. With only one party’s mediation statement 

and no substantive history of back-and-forth, a mediator’s function as a neutral arbiter would be 

defeated. Second, even if a mediator were to reach a decision on such a claim, the claimant would 

have to agree to the mediator’s recommendation in order for the claim to be settled. Id. § 3(d). 

Pursuant to the ADR Procedures, a claim that is not resolved via Evaluative Mediation enters either 

Commonwealth court litigation or arbitration. Id. § 3(f). Litigation or arbitration with a nonresponsive claimant would serve to only further detract the Debtors from other claims 

reconciliation tasks, including those involving responsive claimants. Third, permitting a nonresponsive claimant to proceed through Evaluative Mediation and subsequent litigation or 

arbitration will take at least several months, which will further delay timely resolution of 

corresponding claims. 

Case:17-03283-LTS Doc#:22899 Filed:11/22/22 Entered:11/22/22 12:40:05 Desc: Main

Document Page 14 of 27
 

10

23. In view of these issues, amendment of the ADR Procedures to permit objection to 

claims associated with non-responsive claimants is necessary. These objections would facilitate 

the expeditious and economical determination of said claims. It is for this same reason that courts 

have implemented similar ADR procedures in other complex bankruptcy cases. See, e.g., In re 

PG&E Corp., No. 19-30088 (Bankr. N.D. Cal. Sept. 25, 2020) (ECF No. 9148, Ex. A-2 at 4) (order 

approving ADR procedures allowing objections to claims transferred into but not resolved via 

ADR); Lehman Bros., (Bankr. S.D.N.Y. Apr. 19, 2010) (ECF No. 8474, Ex. A at 4) (same). 

24. Turning to the second category of claims, those seeking administrative expense 

treatment, these were not included within the scope of the ADR Procedures because, when the 

ADR Order was entered, the Debtors were still in the process of assessing the many thousands of

claims asserting administrative priority then filed, even before seeing the multitude of claims filed 

in accordance with the provisions of the Confirmation Order. While the Debtors’ review of these 

claims is nearing completion, such analysis has revealed that a number of claims possibly assert a 

valid entitlement to administrative expense priority. The Debtors currently are limited, however,

in the available avenues to resolve such claims. Because the administrative claims are large in 

number and diverse in complexity, the Debtors seek to be afforded the same flexibility they have 

with respect to general unsecured claims—namely, to be able to resolve each claim in the most 

appropriate and efficient manner based on the characteristics of each claim and claimant. For this 

reason, amendment of the ADR Procedures to add administrative claims is both necessary and 

appropriate. See In re San Bernardino, No. 6:12-28006 (Bankr. C.D. Cal. Feb. 7, 2017) (ECF No.

2164 at 43) (approving the use of ADR procedures to resolve “[a]ll ... claims ... against the City 

or Indemnified Parties . . . .”); id. (Bankr. C.D. Cal. July 29, 2016) (ECF No. 1882-4 at 1) (setting 

Case:17-03283-LTS Doc#:22899 Filed:11/22/22 Entered:11/22/22 12:40:05 Desc: Main

Document Page 15 of 27
 

11

forth ADR procedures applicable to “all Disputed Claims that the City has determined could be 

resolved through the ADR Procedures.”).

B. Amendment of the ADR Procedures Satisfies the Second Factor

25. The second factor—the absence of unfair prejudice to opposing parties—also 

weighs in favor of amendment. In assessing unfair prejudice, the United States Court of Appeals 

for the First Circuit has observed that prejudice must be supported by specific evidence, and that 

it cannot be inferred from the mere passage of time or “usual inconveniences” any party faces

when litigating. Bouret-Echevarria, 784 F.3d at 46 (citing Coon v. Grenier, 867 F.2d 73, 77 (1st 

Cir. 1989) (refusing to infer prejudice simply from the passage of time, and requiring the party 

alleging prejudice to instead show evidence of specific prejudice, such as death of witnesses, 

dimmed memories that are beyond refreshment, loss of evidence, or that some discovery scheme 

“has been thwarted”)). 

26. Here, there is no unfair prejudice because the amendments are discrete and do not 

materially alter the current procedures in place. Further, claimants affected by the amendments 

will receive adequate notice and multiple opportunities to engage with the Debtors throughout the 

ADR process. To begin, the current ADR Procedures require the Debtors to serve an initial ADR 

transfer notice (i.e., the notice listing claims that are being transferred into ADR) on each claimant 

whose claim is subject to said transfer, and service of that notice is accompanied by a copy of the 

ADR Procedures. ADR Order, Ex. 1 § 1(c). 

27. The Procedures also require the Debtors to serve either an Offer or an Information 

Request on each claimant within 60 days of the filing of the initial transfer notice. Id. § 2(b). Both 

Offers and Information Requests set forth a response deadline and include the Debtors’ contact 

Case:17-03283-LTS Doc#:22899 Filed:11/22/22 Entered:11/22/22 12:40:05 Desc: Main

Document Page 16 of 27
 

12

information. On top of this, the Debtors are required to file a status notice with the Court every 

sixty days. Id. § 7(d). This status notice is served on every claimant associated with a claim that 

has been transferred into ADR, and it lists the status of every claim with reference to the applicable 

section(s) of the ADR Procedures. 

28. By way of example, the Fourteenth Alternative Dispute Resolution Status Notice 

[ECF No. 22661] (the “Fourteenth Status Notice”), dated October 21, 2022, lists proof of claim 

number 28144 as “Offer and Exchange.” Fourteenth Status Notice, Ex. A at 2. The corresponding 

footnote explains that “‘Offer and Exchange’ refers to Section 2 of the ADR Procedures [and] 

[c]laimants currently marked as ‘Offer and Exchange’ have received either an Offer or an 

Information Request.” Id. at 46 n.6. As another example, the Fourteenth Status Notice lists proof 

of claim number 27959 as “Initial Transfer.” Id. at 24. The corresponding footnote explains that 

“[c]laims designated as ‘Initial Transfer’ were transferred into the ADR Procedures, pursuant to 

Section 1 thereof, by the Twenty-Sixth Notice of Transfer of Claims to ADR.” Id. at 46 n.7. 

29. To the extent that an affected claim were to be subject to an omnibus objection, a 

claimant associated with such a claim would receive notice and have an opportunity to respond to 

the omnibus objection and be heard at an omnibus objection hearing. See Order (A) Approving 

Limited Omnibus Objection Procedures, (B) Waiving the Requirement of Bankruptcy Rule 

3007(e)(6), and (C) Granting Related Relief [ECF No. 4230]; Omnibus Objection Procedures

[ECF No. 4230-1]; Order Approving the English and Spanish Versions of the Form of Notice for 

Omnibus Objections [ECF No. 4381].

30. Accordingly, amendment of the ADR Procedures does not prejudice claimants.

Case:17-03283-LTS Doc#:22899 Filed:11/22/22 Entered:11/22/22 12:40:05 Desc: Main

Document Page 17 of 27
 

13

C. Amendment of the ADR Procedures Satisfies the Third Factor

31. The third and final factor—timeliness—weighs in favor of granting the Motion. 

“Motions brought pursuant to Rule 60(b)(6) are subject to a ‘reasonable’ time limit, and the 

determination of what is ‘reasonable’ depends upon the circumstances of each case.” BouretEchevarria, 784 F.3d at 43 (citing United States v. Baus, 834 F.2d 1114, 1121 (1st Cir. 1987)). In 

evaluating what constitutes a “reasonable” period of time for purposes of Rule 60(b)(6), courts

within the First Circuit compare the time at which a movant could have filed his or her motion 

against when he or she did in fact file the motion. Id. (citation omitted). Notably, this inquiry 

focuses on whether the movant acted promptly when he or she first became aware of the need to 

file a Rule 60(b)(6) motion. Id. at 43-44. It does not focus on the lapse of time between entry of 

the order at issue and the filing of the motion. Id. 

32. Applying this inquiry, the First Circuit has found that anywhere from eighteen 

months to five years is “reasonable.” Id. at 44 (concluding that an 18-month lapse was reasonable 

because, during the period of time between when movants first became aware of alleged 

misconduct and the filing of movants’ motion, movants “made diligent efforts to strengthen the 

basis for their motion”); Baus, 834 F.2d at 1123 (finding a five-year gap timely because the moving 

party had no reason to file a Rule 60(b)(6) motion until the opposing party changed its mind about 

executing on a judgment). Here, the Motion could not have been filed any earlier because: (a) 

claims transferred into ADR associated with claimants who have not responded to offers or 

counteroffers could not have accrued until after the ADR Procedures were in effect; and (b) the 

Debtors needed sufficient time to review the claims asserting administrative expense priority that 

Case:17-03283-LTS Doc#:22899 Filed:11/22/22 Entered:11/22/22 12:40:05 Desc: Main

Document Page 18 of 27
 

14

have been filed against the Debtors since the commencement of the Title III cases and, more 

importantly, following the entry of the Confirmation Order. The Motion is, therefore, timely. 

NOTICE

33. In accordance with the Court’s standing orders and the Sixteenth Amended Case 

Management Procedures (the “Case Management Procedures”) [ECF No. 20190-1], the Debtors 

have provided notice of this motion, in the form of paper copies thereof sent by first class mail or 

digital copies sent by email, to (a) all creditors who filed proofs of claim which have yet to be 

reconciled, (b) the U.S. Trustee, (c) all creditors who filed notices of correspondence, and (d) the 

Master Service List (as defined in the Case Management Procedures), which is available on the 

Debtors’ case website at https://cases.ra.kroll.com/puertorico. The Debtors submit that, in light of 

the nature of the relief requested, no other or further notice need be given.

NO PRIOR REQUEST

34. No prior request for the relief sought in this Motion has been made to this or any 

other court. 

[Remainder of Page Intentionally Left Blank]

Case:17-03283-LTS Doc#:22899 Filed:11/22/22 Entered:11/22/22 12:40:05 Desc: Main

Document Page 19 of 27
 

15

WHEREFORE the Debtors respectfully request the Court enter an order, substantially in 

the form attached hereto as Exhibit A, amending the ADR Procedures as set forth therein, and

granting the Debtors such other relief as is just and proper. 

Dated: November 22, 2022

San Juan, Puerto Rico

Respectfully submitted,

/s/ Brian S. Rosen 

Martin J. Bienenstock

Brian S. Rosen 

Laura Stafford

(Admission 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 

Debtors

/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 

Debtors

Case:17-03283-LTS Doc#:22899 Filed:11/22/22 Entered:11/22/22 12:40:05 Desc: Main

Document Page 20 of 27
 

EXHIBIT A

Case:17-03283-LTS Doc#:22899 Filed:11/22/22 Entered:11/22/22 12:40:05 Desc: Main

Document Page 21 of 27
 

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

(Jointly Administered)

ORDER GRANTING MOTION OF THE FINANCIAL OVERSIGHT AND 

MANAGEMENT BOARD FOR PUERTO RICO TO AMEND 

ALTERNATIVE DISPUTE RESOLUTION PROCEDURES 

 

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-BK3567-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).

Case:17-03283-LTS Doc#:22899 Filed:11/22/22 Entered:11/22/22 12:40:05 Desc: Main

Document Page 22 of 27
 

1

Upon the Motion of the Financial Oversight and Management Board for Puerto Rico to 

Amend Alternative Dispute Resolution Procedures, dated November 22, 2022 (the “Motion”),2 of 

the Debtors for entry of an order (this “Order”) authorizing amendment of the alternative dispute 

resolution procedures, and granting related relief as more fully described in the Motion; and this 

Court having jurisdiction over this matter pursuant to PROMESA section 306(a); and it appearing 

that venue is proper pursuant to PROMESA section 307(a); and the Court having found that the 

relief requested in the Debtors’ Motion is in the best interests of the Debtors, their creditors, and 

other parties in interest; and the Court having found that, based upon the relief requested by the 

Debtors’ Motion, no other or further notice is required; and the Court having determined that the 

legal and factual bases set forth in the Debtors’ Motion establish just cause for the relief granted 

herein; and any objections to the relief requested herein having been resolved as set forth herein, 

or withdrawn or overruled on the merits; and after due deliberation and sufficient cause appearing 

therefor,

IT IS HEREBY ORDERED THAT:

1. The Motion is granted to the extent set forth herein. 

2. Sections 2(c), 2(f), 3(a), 6(c), 7(b), and 7(c) of the ADR Procedures are hereby 

amended as follows:

2. Offer Exchange Procedures

c) Within twenty-five (25) days of service of an Offer via either an Offer 

Letter or an ADR Notice, the Designated Claimant must respond to such 

Offer by (1) accepting the Offer, by execution and delivery of a stipulation 

provided by the Commonwealth or such other Debtor in connection with 

the Offer or (2) submitting a counteroffer (the “Counteroffer”); provided, 

 

2 All capitalized terms used but not otherwise defined herein shall have the meanings ascribed to them in the Motion.

Case:17-03283-LTS Doc#:22899 Filed:11/22/22 Entered:11/22/22 12:40:05 Desc: Main

Document Page 23 of 27
 

2

however, that any Counteroffer may only propose an amount that, if agreed 

upon, will fix the amount of the creditor’s claim; and, provided, further, that 

if the creditor fails to timely respond to the Offer Letter, the Offer shall be 

deemed rejected. If the Designated Claimant rejects, or is deemed to have 

rejected, the Offer, the Designated Claim will advance to the next step of 

the ADR Procedures, as set forth below. If the Designated Claimant is 

deemed to have rejected the Offer by failing to timely respond to the 

Offer Letter, it shall constitute non-compliance with the procedures set 

forth herein, and the Debtors are authorized to object to the Claim, 

which may result in disallowance and expungement of the associated 

claim in whole or in part. 

...

f) Within thirty (30) days of receipt of any Counteroffer, the 

Commonwealth or such other Debtor, as the case may be, may (1) accept 

such Counteroffer, by delivery of a stipulation evidencing agreement to the 

proposed amount, or (2) reject such Counteroffer, by delivery of notice to 

such Designated Claimant that such Counteroffer is unacceptable. The 

Commonwealth or such other Debtor, as the case may be, may also submit 

its own counteroffer to the creditor, and the parties may exchange as many 

offers and counteroffers (each, a “Further Offer”) as they deem appropriate 

prior to a determination that an impasse has been reached. The Debtors or 

the Designated Claimant shall have thirty (30) days from receipt of each 

such Further Offer (1) to accept such Further Offer, by delivery of a 

stipulation evidencing agreement to the proposed amount, or (2) to reject 

such Further Offer, by delivery of notice that such Further Offer is 

unacceptable. Failure to respond to a Further Offer within thirty (30) days 

of receipt shall constitute non-compliance with the procedures set forth

herein, and the Debtors are authorized to object to the Claim, which 

may result in disallowance and expungement of the associated claim in 

whole or in part be deemed rejection of such Further Offer. The 

Commonwealth or such other Debtor, as the case may be, may also request 

additional information or documentation (the “Information Request”) from 

the Designated Claimant. The Designated Claimant shall provide additional 

documentation or information in response to such Information Request 

within twenty-one (21) days following receipt of such Request. Within ten 

(10) days of either the Designated Claimant’s or the Debtor’s rejection of 

an Offer, Counteroffer, or Further Offer, the Debtor(s) shall file a notice of 

impasse (the “Offer Exchange Impasse Notice”) with the Title III Court. 

Case:17-03283-LTS Doc#:22899 Filed:11/22/22 Entered:11/22/22 12:40:05 Desc: Main

Document Page 24 of 27
 

3

...

3. Evaluative Mediation

a) In the event that a Claim is not resolved through the Offer Exchange 

process, the Claim will proceed to the next step of the ADR Procedures. If 

the Designated Claimant is deemed to have rejected the Offer or a 

Further Offer by failing to timely respond to the Offer Letter, it shall

constitute non-compliance with the procedures set forth herein, and the 

Debtors are authorized to object the Claim, which may result in 

disallowance and expungement of the associated claim in whole or in 

part. If the Designated Claimant timely responds but rejects an Offer 

or a Further Offer, the Claim will proceed to an evaluation (“Evaluative 

Mediation”) of the Designated Claimant’s claim by a mediator (“Mediator”) 

identified by the Title III Court in its sole and absolute discretion, including 

a federal judge. The Purpose of the Evaluative Mediation phase of the ADR 

Procedures is to obtain a non-binding, confidential, monetary valuation of 

each Designated Claim that may assist in achieving settlement by serving 

as a focal point for further discussions between the parties. 

...

6. Commonwealth Court Litigation of Unresolved Claims

...

c) For purposes of the ADR Procedures, the The Commonwealth’s 

courts will only resolve the amount of a creditor’s general unsecured claim

or administrative expense priority claim. Without limiting the foregoing, 

any other issue, including, without limitation, the priority or classification 

of a claim, distributions with respect thereto, and issues related to 

subordination thereof, shall not be subject to the Commonwealth court’s 

determination and shall be determined in connection with the provisions of 

an applicable plan of adjustment or as otherwise determined by the Title III 

Court.

...

7. General Provisions Regarding ADR Procedures

...

b) The ADR Procedures will only resolve the amount of a creditor’s general 

unsecured claim or administrative expense priority claim. Without 

Case:17-03283-LTS Doc#:22899 Filed:11/22/22 Entered:11/22/22 12:40:05 Desc: Main

Document Page 25 of 27
 

4

limiting the foregoing, any other issue, including, without limitation, the 

priority or classification of a claim, distributions with respect thereto, and 

issues related to subordination thereof, shall not be subject to the ADR 

Procedures and shall be determined in connection with the provisions of an 

applicable plan of adjustment or as otherwise determined by the Title III 

Court. 

c) To the extent a holder of a general unsecured claim or administrative 

expense priority claim has filed, sought or seeks any relief related to a 

Claim that is subject to the ADR Procedure, including, without limitation, 

relief sought in any adversary proceeding or any other applicable court of 

law (collectively, the “Actions”), and such Designated Claimant has not 

elected to liquidate their Claim through the process outlined in Section 6 

above, such Actions shall be stayed (including with respect to pending 

discovery) until the ADR Procedure with respect to such Claim has been 

completed. Within five (5) business days of entry of a final order with 

respect to the validity and amount of such Claim in the ADR Procedure, a 

motion shall be filed in the applicable forum to dismiss any corresponding 

portion of such Action, with prejudice, and to transfer any remaining portion 

of such Action, to the extent not pending or subject to the Debtors’ Title III 

cases, to the Title III Court presiding over the Debtors’ Title III cases. To 

the extent required, the automatic stay, extant pursuant to section 362 of the 

Bankruptcy Code, applicable herein in accordance with section 301 of 

PROMESA, shall be deemed modified solely for the purpose of 

determining the validity and amount of a claim pursuant to the ADR 

Procedure. 

3. The Debtors are authorized to take any and all actions reasonably necessary or 

appropriate to effectuate the relief granted pursuant to this Order in accordance with the Motion, 

including but not limited to the implementation of necessary conforming edits to the ADR Notice 

(as defined in the ADR Procedures) to reflect the changes immediately above.

4. The Debtors’ right to seek further amendment of the ADR Procedures is 

preserved;

5. This Order resolves docket entry No. ______

6. This Court retains exclusive jurisdiction with respect to all matters arising from 

or related to the implementation, interpretation, and enforcement of this Order.

Case:17-03283-LTS Doc#:22899 Filed:11/22/22 Entered:11/22/22 12:40:05 Desc: Main

Document Page 26 of 27
 

5

SO ORDERED.

Dated: , 2022

 LAURA TAYLOR SWAIN

 United States District Judge

Case:17-03283-LTS Doc#:22899 Filed:11/22/22 Entered:11/22/22 12:40:05 Desc: Main

Document Page 27 of 27