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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)

THIRD 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 third status report (“Third 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)]. 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”). The 

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

2. On October 20, 2022, the Trustee filed its second status report in accordance with 

the Procedures. [See DE No. 22649] (“Second Status Report”).

3. The First Status Report and Second 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. Accordingly, the Trustee respectfully submits below its Third Status Report.2

THIRD STATUS REPORT

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

Status Report and Second Status Report, this Third Status Report attaches a case update as Exhibit 

A (the “Third Case Update”), and (ii) all updates within the thirty-day period since the Trustee’s 

filing of the Second Status Report are emphasized using a red font color in the Third Case Update. 

6. As part of this Third Status Report, the Trustee summarizes certain data points 

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

filing of the Second Status Report: 

2 On November 14, 2022, the Trustee submitted an Urgent Uncontested Omnibus Motion for Extension of Deadlines 

Concerning Scheduling of Mediations [DE No. 22862 in Case No. 17- 3283] requesting that the Court extend the 

deadline to schedule mediation from November 21, 2022 to January 20, 2023 (“Extension Motion”). On November 

15, 2022, the Court entered an Order Setting Briefing Scheduling on the Extension Motion which required that any 

opposition to the Extension Motion must be filed by on November 18, 2022 [DE No. 22872] (“Briefing Order”). As 

of the filing of this Third Status Report, the Court has not entered an order deciding the Extension Motion, nor has 

there been any filing opposing the Extension Motion.

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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 numerous efforts 

to schedule mediations in Avoidance Actions that had not yet scheduled 

a mediation date. 

c. The Trustee has now submitted thirty-three (33) Position Papers3to 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 twenty-one (21) 

defendants, which includes ten (10) mediations since the Second Status 

Report. 

e. The Trustee has scheduled an additional thirteen (13) mediations to 

occur, which includes six (6) appointments since the Second Status 

Report. 

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

of re-scheduling previously-scheduled mediations) in eight (8) of the 

Avoidance Actions, including five (5) tentative mediation dates since 

the Second Status Report.

3 As the Trustee noted in the First Status Report and the Second 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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g. Since the Second Status Report, the Trustee has continued to engage in 

informal communications with six (6) defendants with the aim of 

scheduling mediation with them in the near term. 

h. The Trustee reports that only one (1) defendant has failed to respond to 

the Trustee’s several invitations to mediate, despite repeated 

communications. The Second Status Report reported three (3) such 

Defendants. The Trustee will endeavor to schedule mediation with such 

defendant notwithstanding the unresponsiveness to date.

i. The Trustee has reached a settlement with three (3) Avoidance Actions 

defendants following mediation. For one defendant, the Trustee has 

documented that settlement and has dismissed the defendant from the 

respective matter. 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. Finally, since the 

Second Status Report, the Trustee settled with another defendant and is 

working to document that settlement. 

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. 

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7. 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 sent several invitations to the Tolled 

Parties to mediation, using the same process as for the Avoidance Actions defendants, although 

acknowledging that participation is voluntary. 

8. 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. Ninety-four percent (94%) of the Tolled Parties have agreed to mediation. 

c. Fifty-five percent (55%) of the Tolled Parties have already scheduled mediation.

d. Thirty-three percent (33%) of the Tolled Parties are in the process of scheduling 

mediation.

e. Fifty-five percent (55%) of the Tolled Parties have received a Position Paper from 

the Trustee. 

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

been responsive throughout this process. 

Dated this 18th day of November 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 

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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

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 November 18, 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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