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UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF PUERTO RICO

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In re:

THE FINANCIAL OVERSIGHT AND

MANAGEMENT BOARD FOR PUERTO RICO,

as representative of

THE COMMONWEALTH OF PUERTO RICO et al.,

Debtors.1

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PROMESA

TITLE III

Case No. 17-BK-3283-LTS

(Jointly Administered)

SECOND STATUS REPORT OF THE AVOIDANCE ACTIONS TRUSTEE 

IN CONNECTION WITH THE COURT’S AVOIDANCE ACTION PROCEDURES

Drivetrain, LLC (“Trustee”), in its capacity as the trustee of the Commonwealth Avoidance 

Actions Trust, respectfully submits this second status report (“Second Status Report”) in 

compliance with Part III of the Court’s Avoidance Action Procedures [DE No. 20937, Appendix 

2] (“Procedures”) and respectfully states as follows:

RELEVANT BACKGROUND

1. The Court’s Procedures required the Trustee to file a “brief update on the status of 

each Avoidance Action, including (as to each such action that remains pending at such time) 

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 

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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whether the parties are engaging in informal settlement discussions, the schedule established for 

mediation, and whether the Trustee expects the Avoidance Action to be litigated.” [Procedures, 

DE No. 20937, Appendix 2, Pt. III, § (i)].

2. In accordance with the Procedures, the Trustee, on September 20, 2022, filed its 

first status report following the conclusion of the first one hundred and twenty (120) days of the 

Stay Period. [See DE No. 22331] (“First Status Report”).

3. The First Status Report included a Case Update that detailed the Trustee’s progress

and efforts concerning undertaking informal settlement discussions and mediations in the pending 

Avoidance Actions. 

4. The Procedures require further status reports “every thirty (30) days thereafter.”

5. Accordingly, the Trustee respectfully submits below its Second Status Report.

STATUS REPORT

6. For the Court’s reference, the Trustee respectfully notes that: (i) as with the First 

Status Report, this Second Status Report attaches a Case Update as Exhibit A (the “Second Case 

Update”), and (ii) all updates within the thirty-day period since the Trustee’s filing of the First 

Status Report are emphasized using a red font color. 

7. As part of this Second Status Report, the Trustee summarizes certain data points 

contained within the attached Second Case Update, with a particularized focus on updates since 

the filing of the First Status Report: 

a. There are fifty-one (51) Avoidance Actions that have been filed, which

are subject to the Procedures. 

b. The Trustee has sent each of the defendants in the Avoidance Actions 

more than one invitation to mediate, and has continued its efforts to 

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schedule mediations in Avoidance Actions that had not yet scheduled a 

mediation date. 

c. The Trustee has now submitted twenty-five (25) Position Papers2 to the 

Avoidance Actions defendants and will continue to submit Position 

Papers to each defendant in advance of mediation as those mediations 

are scheduled. 

d. The Trustee has already completed mediation with eleven (11) 

defendants, which includes four (4) mediations since the First Status 

Report. 

e. The Trustee has scheduled an additional eighteen (18) mediations to 

occur, which includes sic (6) appointments since the First Status Report. 

f. The Trustee has tentatively scheduled mediations (or is in the process 

of re-scheduling previously-scheduled mediations) in five (5) of the 

Avoidance Actions, including one (1) tentative mediation dates since 

the First Status Report.

g. Since the First Status Report, the Trustee has continued to engage in

informal communications with twelve (12) defendants with the aim of

scheduling mediation with them in the near term. 

h. The Trustee reports that only three (3) defendants have failed to respond 

to the Trustee’s invitation to mediate, despite repeated communications. 

The First Status Report reported six (6) such Defendants. The Trustee 

2 As the Trustee noted in the First Status Report, the Trustee is continuing to provide its detailed, written position 

regarding the pending claims in advance of mediation as they are scheduled. These Position Papers are the result of a 

factual and legal analysis of the issues related to each individual claim, including consideration of any defenses raised 

by the defendant or tolled party.

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will endeavor to schedule mediation with such defendants 

notwithstanding the unresponsiveness to date.

i. The Trustee has reached a settlement with two Avoidance Actions

defendants following mediation. For one defendant, the Trustee has 

documented that settlement and is waiting for payment from the 

defendant before filing any final dismissal papers. For the other 

defendant, the Trustee has reached a settlement in principle and the 

Parties are conducting further due diligence and finalizing the 

settlement documents. 

j. As part of the Trustee’s ongoing effort to engage in settlement and premediation communications with defendants, one defendant has 

indicated that the Trustee may seek a default judgment with the court. 

In light of this communication, the Trustee has requested from this 

defendant whether it would consent to a judgment. In any event, the 

Trustee anticipates lifting the stay as to this one action once the Trustee 

has obtained insight from defendant’s counsel. 

8. In addition to the Avoidance Actions Defendants, the Trustee continues to use the 

established mediation framework as an opportunity to engage with parties subject to tolling 

agreements (“Tolled Parties”), even though they are not subject to the Court’s Order implementing 

the Procedures. As previously reported, the Trustee has invited the Tolled Parties to mediation, 

using the same process as for the Avoidance Actions defendants, although acknowledging that 

participation is voluntary. 

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9. Mindful of the confidentiality imposed by the tolling agreements, the Trustee can

report the following: 

a. The Trustee has invited one hundred percent (100%) of the Tolled Parties to

mediation.

b. Eighty-three percent (83%) of the Tolled Parties have agreed to mediation.

c. Fifty-six percent (56%) of the Tolled Parties have already scheduled mediation.

d. Twenty-eight percent (28%) of the Tolled Parties are in the process of scheduling

mediation.

e. Fifty percent (50%) of the Tolled Parties have received a Position Paper from the

Trustee.

f. Only six percent (6%) of the Tolled Parties have failed to respond to the Trustee’s

invitation to mediate, despite repeated communications.

10. The Trustee appreciates the efforts of the defendants and their counsel who have

been responsive throughout this process. 

Dated this 20th day of October 2022 

Respectfully submitted by: 

/s/ John Arrastia 

John Arrastia, Esq. (Pro Hac Vice) 

Jesus M. Suarez, Esq. (Pro Hac Vice) 

Angelo M. Castaldi, Esq. (Pro Hac Vice) 

CONTINENTAL PLLC 

255 Alhambra Cir. Suite 640 

Coral Gables, FL 33134 

Tel: 305-677-2707 

JArrastia@continentalpllc.com

JSuarez@continentalpllc.com

ACastaldi@continentalpllc.com

Counsel to the Trustee 

/s/ Juan J. Casillas Ayala

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Juan J. Casillas Ayala, Esq. (USDC-PR 218312)

Luis F. Llach Zúñiga, Esq. (USDC-PR 223112)

Juan C. Nieves González, Esq. (USDC-PR 231707)

Edna Tejeda Oyola (USDC-PR 219803)

CASILLAS, SANTIAGO & TORRES LLC 

El Caribe Office Building 

53 Palmeras Street, Ste. 1601 

San Juan, Puerto Rico 00901-2419 

Telephone: (787) 523-3434 

jcasillas@cstlawpr.com

lllach@cstlawpr.com

jnieves@cstlawpr.com

etejeda@cstlawpr.com

CERTIFICATE OF SERVICE

I HEREBY CERTIFY that on October 20, 2022, I electronically filed the foregoing 

motion with the Clerk of the Court using the CM/ECF system, which will send notification of such 

filing to all appearing parties in the captioned proceeding. 

/s/ John Arrastia

John Arrastia, Esq.

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