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F29UNITED 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) 

In re: 

THE FINANCIAL OVERSIGHT AND 

MANAGEMENT BOARD FOR PUERTO RICO, 

 as representative of 

PUERTO RICO ELECTRIC POWER 

AUTHORITY, 

Debtors. 

PROMESA 

Title III 

No. 17 BK 4780-LTS 

MEDIATION TEAM’S SECOND NOTICE AND REPORT 

To the Honorable United States District Judge Laura Taylor Swain: 

 

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 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 (“Commonwealth”) (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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PLEASE TAKE NOTICE that, on April 8, 2022, the Court entered an order (the 

“Appointment Order”)2

 appointing a Mediation Team comprising the Honorable Shelley C. 

Chapman as lead mediator, the Honorable Robert D. Drain, and the Honorable Brendan L. 

Shannon (collectively, the “Mediation Team”) to facilitate confidential negotiations among the 

Mediation Parties (and any other Mediation Party added in the Mediation Team’s discretion) 

regarding the Mediation Topics (the “Mediation”). On the same date, the Court entered its 

Order Establishing the Terms and Conditions of Mediation (the “Terms and Conditions Order”). 

PLEASE TAKE FURTHER NOTICE that the termination date of the Mediation (the 

“Termination Date”) has been extended by the Court multiple times. Pursuant to the Court’s 

Amendments to Order Establishing the Terms and Conditions of Mediation (the “Amended 

Terms and Conditions Order”),3 the Court established a revised Termination Date of December 

31, 2022, and further stated that “the Mediation Team may extend the Termination Date based 

on its assessment of the material progress of the Mediation but in no event shall extend the 

Termination Date beyond January 31, 2023, at 11:59 p.m. (Atlantic Standard Time), without 

this Court’s approval after notice of such proposed extension to parties in interest.”4 The 

Amended Terms and Conditions Order also authorized the Mediation Team “to make periodic 

written status reports in its discretion.”5 The Amended Terms and Conditions Order further 

provided that the Appointment Order and the Terms and Conditions Order (except as modified 

by the Amended Terms and Conditions Order) remain in full force and effect. 

 

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 Capitalized terms not otherwise defined herein have the meaning ascribed to them in the Appointment 

Order. 

3

 Case No. 17-3283, Docket No. 22409; Case No. 17-4780, Docket No. 3011. 

4

 Amended Terms and Conditions Order, ¶ 3. 

5

 Amended Terms and Conditions Order, ¶ 5.

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PLEASE TAKE FURTHER NOTICE that, on September 29, 2022, the Court entered 

the Order (A) Granting in Part and Denying in Part Urgent Motion of Financial Oversight and 

Management Board for Order (I) Establishing Scheduled to Continue Negotiations During 

Litigation of Gating Issues Pursuant to Litigation Schedule and (II) Granting Related Relief and 

(B) Staying Certain Motions Filed by PREPA Bondholders (the “Scheduling Order”).6 The 

Scheduling Order directed the Oversight Board “to file, by December 1, 2022, a proposed plan 

of adjustment that it believes could be confirmable, taking into account the litigation risk and 

economic issues that are in dispute. The plan may, but is not required to, include alternative 

provisions addressing proposed resolutions contingent on different outcomes of the disputed 

issues. It must be accompanied by a disclosure statement (and corresponding motion for 

approval thereof) and proposed confirmation schedule contemplating a June 2023 confirmation 

hearing.” 

STATEMENT OF MEDIATION TEAM

1. The Mediation Team respectfully submits this Second Notice and Report as a 

status report in accordance with paragraph 5 of the Amended Terms and Conditions Order. 

2. Despite reasonable requests by the Ad Hoc Group and the Monolines,7

 the 

Oversight Board is still in the process of providing basic data and analyses relevant to the 

ongoing plan negotiations. Without such information, the Mediation Team believes no further 

progress towards a consensual resolution can be achieved. Stated differently, good faith 

negotiations between the Oversight Board, the Ad Hoc Group, and the Monolines require 

transparency from both sides and continued engagement based on a reasonable set of underlying 

facts and assumptions, with each side willing to be persuaded that its analyses are not 

 

6

 Case No. 17-3283, Docket No. 22410; Case No. 17-4780, Docket No. 3012. 

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 National, Syncora, and Assured shall collectively be referred to herein as the “Monolines.” 

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necessarily dispositive. Accordingly, the Mediation Team requests that this Court extend the 

Scheduling Order’s December 1, 2022 deadline for the Oversight Board to file a proposed plan 

of adjustment by one week, subject to the following conditions, to which the Oversight Board, 

the Ad Hoc Group, and the Monolines have agreed: (i) the Oversight Board shall promptly 

deliver to the Ad Hoc Group and the Monolines, on a rolling basis, all of the information on 

which the Oversight Board has relied in formulating its current position in the ongoing plan 

negotiations, with such delivery to be completed by the close of business on December 2, 2022; 

(ii) the Oversight Board’s professionals shall make themselves available to the Ad Hoc Group’s 

and the Monolines’ professionals promptly to review such information and answer questions 

raised; (iii) the Oversight Board shall engage in good faith negotiations during the extension; 

and (iv) the omnibus hearing scheduled for December 14, 2022 shall be held as scheduled. 

Given the importance of the deadline that the Court set, the Mediation Team makes this request 

reluctantly, but believes that the alternative of filing a plan on December 1, 2022 in the present 

context would be significantly less conducive to a negotiated resolution of this case. 

3. The Mediation Team will continue its efforts to achieve a global consensus and 

to do so before the end of the calendar year. The Mediation Team is of course available to 

answer any questions the Court may have. 

Dated: December 1, 2022 /s/ Shelley C. Chapman 

SHELLEY C. CHAPMAN 

Willkie Farr & Gallagher LLP 

 /s/ Brendan L. Shannon 

BRENDAN L. SHANNON 

United States Bankruptcy Judge 

 /s/ Robert D. Drain 

ROBERT D. DRAIN 

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United States Bankruptcy Judge

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