221214 ORD RE REVISED PROP ORD OF AMEND ADR PROCED VERSION DECEMBER 14, 2022 1

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 REQUIRING MODIFICATION OF THE DEBTORS’ REVISED PROPOSED 

ORDER AUTHORIZING AMENDMENT TO THE ALTERNATIVE DISPUTE RESOLUTION PROCEDURES

For the reasons stated on the record at the December 14, 2022 omnibus hearing, 

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

directed to make the following revisions2to the proposed Order Granting Motion of the 

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

Resolution Procedures (Docket Entry No. 23040 in Case No. 17-3283, Ex. B) (the “Proposed 

Order”) and the proposed Amended Alternative Dispute Resolution Procedures, provided as 

Exhibit 1 to the Proposed Order. The Oversight Board shall remove the proposed amendments 

to Section 3(f) and shall insert amendments to Sections 2 and 3 in substantially the following 

form: 

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-BK3283- 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).

2 Required modifications are denoted with bold language. 

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221214 ORD RE REVISED PROP ORD OF AMEND ADR PROCED VERSION DECEMBER 14, 2022 2

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, 

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, and the Debtor files an Offer 

Exchange Impasse Notice (as defined below) that complies with 

Section 2(f) below, the Designated Claim will advance to the next step of 

the ADR Procedures, as set forth below.

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 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. If the Designated Claimant is deemed 

to have rejected an Offer or a Further Offer by failing to timely 

respond to an Offer or Further Offer, the Offer Exchange Impasse 

Notice must include a certification that the Debtor has been in contact 

with the Designated Claimant and the Designated Claimant has 

consented to proceed to Evaluative Mediation (as defined below).

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3. Evaluative Mediation 

c) During the Evaluative Mediation process, the Designated Claim shall be 

evaluated by the assigned Mediator. The Debtors shall provide notice to 

the Designated Claimant within a reasonable time following the 

assignment of a Mediator to a Designated Claim. Upon assignment of a 

Mediator to a Designated Claim, the Debtor shall provide the Mediator, 

with copy to the Designated Claimant, with all information exchanged 

during the Offer Exchange process. Within fourteen (14) days of 

assignment of the Mediator, each party may provide to the Mediator a 

mediation statement (the “Mediation Statement”), not to exceed seven (7) 

pages double-spaced. Within twenty-eight (28) days of receipt of the 

information exchanged during the Offer Exchange process, the Mediator 

shall estimate the monetary value of the Designated Claim (the 

“Evaluation”). Upon notice to the parties, the Mediator may extend the 

time period for completion of the Evaluation for a period of no more than 

fourteen (14) days. The Evaluation shall be limited to a determination of 

the monetary value, if any, of the Designated Claim, and shall not raise or 

purport to evaluate any issues relating to the potential treatment or priority 

of the Designated Claim pursuant to a plan of adjustment. If the Mediator 

fails to issue an Evaluation within the time periods set forth in this 

paragraph, the Designated Claim shall proceed to binding arbitration, 

where both parties have consented to same, or to litigation before the 

Commonwealth or Title III Courts, as the case may be. If a Designated 

Claimant fails to submit a Mediation Statement, the Mediator may 

solicit engagement of the Designated Claimant in advance of the 

formulation of the Evaluation. This outreach by the Mediator shall 

include notifying the Designated Claimant that failure to respond and 

participate may result in the termination of the Evaluative Mediation 

process without further advance notice. If the Designated Claimant is 

nonresponsive to the Mediator’s reasonable effort(s) at outreach 

during the Evaluative Mediation process, a Mediator may file a Notice 

of Non-Engagement. The Notice of Non-Engagement shall identify 

the party’s failure to engage in the Evaluative Mediation process and 

indicate that the Mediator has determined that there is insufficient 

engagement or information to warrant the formulation and issuance 

of an Evaluation. The Meditator’s filing of a Notice of NonEngagement will terminate the Evaluative Mediation and the 

corresponding Designated Claim will be treated as an Unresolved 

Claim (as defined below).

e) At any time during Evaluative Mediation, the Mediator may request that 

the parties participate in a settlement conference. The parties must 

participate in any settlement conference called by the Mediator. Such 

conference may take place in person or telephonically, in the Mediator’s 

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221214 ORD RE REVISED PROP ORD OF AMEND ADR PROCED VERSION DECEMBER 14, 2022 4

sole discretion. The Evaluative Mediation process shall terminate upon the 

earlier of: (a) the Mediator’s filing of a notice that (i) a Notice of NonEngagement, (ii) a notice that the parties have reached an impasse (a 

“Mediator’s Impasse Notice”), or (iii) a notice that the parties have 

reached a settlement (such notice shall specify the settlement amount, 

which shall constitute the liquidated amount of the Designated Claim and 

the Claims Register shall be updated accordingly); and (b) 75 days after 

the issuance of the Evaluation.

The Oversight Board is further directed to submit (i) a revised Form of Notice,

and (ii) a redlined version of the Order (A) Authorizing Alternative Dispute Resolution 

Procedures, (B) Approving Additional Forms of Notice, and (C) Granting Related Relief (Docket 

Entry No. 12576 in Case No. 17-3283) identifying all the above modifications and the additional 

amendments approved by the Court at the omnibus hearing. The Oversight Board shall file these 

materials by December 16, 2022, at 12:00 p.m. (Atlantic Standard Time). Any party who 

wishes to object to the revised proposed order or Form of Notice shall file such objection by 

December 19, 2022, at 5:00 p.m. (Atlantic Standard Time). 

SO ORDERED.

Dated: December 14, 2022

 /s/ Laura Taylor Swain

LAURA TAYLOR SWAIN

United States District Judge

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