UNITED STATES DISTRICT COURT

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

THE PUERTO RICO HIGHWAYS AND

TRANSPORTATION AUTHORITY,

Debtor.

PROMESA

Title III

No. 17 BK-3567-LTS

DECLARATION OF DAVID SKEEL IN RESPECT OF 

CONFIRMATION OF FOURTH AMENDED TITLE III

PLAN OF ADJUSTMENT FOR THE PUERTO RICO 

HIGHWAYS AND TRANSPORTATION AUTHORITY 

I, David A. Skeel, Jr., hereby declare and state as follows:

1. I am the Chairman of the Financial Oversight and Management Board for Puerto 

Rico (the “Oversight Board”), the sole Title III representative of the Puerto Rico Highways and 

Transportation Authority (“HTA” or the “Debtor”) pursuant to Section 315(b) of the Puerto Rico 

Oversight, Management, and Economic Stability Act (“PROMESA”). 

 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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2. I submit this declaration (the “Declaration”) in respect of confirmation of the 

Fourth Amended Title III Plan of Adjustment of the Puerto Rico Highways and Transportation 

Authority (as may be amended, supplemented, or modified further, the “HTA Plan”) (Debtor’s 

Exhibit 58) [Case No. 17-BK-3567-LTS, ECF No. 1354-6], and in response to certain objections 

interposed to confirmation of the HTA Plan. I have reviewed the HTA Plan and any capitalized 

terms used but not otherwise defined herein shall have the meanings assigned to such terms in the 

HTA Plan.

3. My statements set forth in this Declaration are based on my personal knowledge 

except where I reference specific documents or communications as the basis of my statements. In 

those instances where I reference a specific document or communication, the specific document 

or communication either is not being offered to prove the truth of the matter asserted in the 

statement or, I am informed, is otherwise admissible because, for instance, it is a selfauthenticating public record or can be otherwise authenticated and shown to be admissible.

4. I have read and am familiar with (i) the HTA Plan, (ii) the Disclosure Statement for 

the Third Amended Title III Plan of Adjustment of the Puerto Rico Highways and Transportation 

Authority (Debtor’s Exhibit 2) [Case No. 17-BK-3567-LTS, ECF No. 1299-2;1299-3] (the “HTA 

Disclosure Statement”) as approved by an order of the Title III Court, dated June 22, 2022 [Case 

No. 17-BK-3567-LTS, ECF No. 1248]; (iii) the Amended Plan Supplement and Plan Related 

Documents of the Puerto Rico Highways and Transportation Authority (the “Plan Supplement”)2

(Debtor’s Exhibit 60) [Case No. 17-BK-3567-LTS, ECF No. 1354-8]; (iv) the agreements among 

the Oversight Board and various parties to support the HTA Plan (including, the HTA/CCDA Plan 

 2 The Plan Supplement amends the Supplement to the Third Amended Title III Plan of Adjustment of the Puerto Rico 

Highways and Transportation Authority (Debtor’s Exhibit 22) [Case No. 17-BK-3567-LTS, ECF No. 1300-2], 

which I have also reviewed.

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Support Agreement, and the DRA Stipulation, and collectively the “PSAs”); (v) the HTA 

Committee Agreement (Debtor’s Exhibit 15) [Case No. 17-BK-3567-LTS, ECF No. 1299-17]; 

(vi) the June 2020 HTA Fiscal Plan (Debtor’s Exhibit 3) [Case No. 17-BK-3567-LTS, ECF No. 

1299-4]; (vii) the May 2021 HTA Fiscal Plan (Debtor’s Exhibit 4) [Case No. 17-BK-3567-LTS, 

ECF No. 1299-5]; and the February 2022 HTA Fiscal Plan (Debtor’s Exhibit 5) [Case No. 17-BK3567-LTS, ECF No. 1299-6] (collectively, the “HTA Fiscal Plans”), (viii) the 2022 HTA Budget 

(Debtor’s Exhibit 6) [Case No. 17-BK-3567-LTS, ECF No. 1299-7], (ix) the 2023 HTA Budget 

(Debtor’s Exhibit 7) [Case No. 17-BK-3567-LTS, ECF No. 1299-8], (x) the 2021 Commonwealth 

Fiscal Plan (Debtor’s Exhibit 8) [Case No. 17-BK-3567-LTS, ECF No. 1299-9], (xi) the 2022 

Commonwealth Fiscal Plan (Debtor’s Exhibit 9) [Case No. 17-BK-3567-LTS, ECF No. 1299-10; 

1299-11], (xii) the 2022 Commonwealth Budget (Debtor’s Exhibit 10) [Case No. 17-BK-3567-

LTS, ECF No. 1299-12], (xiii) the 2022 Commonwealth Amended Budget (Debtor’s Exhibit 11) 

[Case No. 17-BK-3567-LTS, ECF No. 1299-13], (xiv) the 2022 Commonwealth Second Amended 

Budget (Debtor’s Exhibit 12) [Case No. 17-BK-3567-LTS, ECF No. 1299-14], (xv) the 2023 

Commonwealth Budget (Debtor’s Exhibit 13) [Case No. 17-BK-3567-LTS, ECF No. 1299-15], 

(xvi) the list of covered entities approved by the Oversight Board at its September 30, 2016 

meeting (Debtor’s Exhibit 61) [Case No. 17-BK-3567-LTS, ECF No. 1354-9], and (xvii) the 

documents filed in the HTA Title III Case.

5. As described below, in my role as Chairman of the Oversight Board, I believe (i) 

the HTA Plan complies with the factual requirements of PROMESA Section 314(b), (ii) the 

payment of Consummation Costs or Restriction Fees under the HTA Plan is reasonable and fair,

(iii) the HTA Plan’s release, injunction, and exculpation provisions are reasonable, and (iv) the 

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Commonwealth laws identified in Exhibit F to the HTA Plan as preempted are inconsistent with 

PROMESA. (Debtor’s Exhibit 58) [Case No. 17-BK-3567-LTS, ECF No. 1354-6].

I. Introduction and Overview Regarding Development of the HTA Plan

A. My Background and Experience, and the Creation and Function of the 

Oversight Board

6. I received my Juris Doctorate from the University of Virginia School of Law in 

1987, and my Bachelor of Arts degree in Zoology and English from the University of North 

Carolina at Chapel Hill in 1983.

7. I am the S. Samuel Arsht Professor of Corporate Law at the University of 

Pennsylvania Carey Law School, a position I have held since 2004. I have been a Professor of 

Law at the University of Pennsylvania Law School since 1999.

8. My research and academic focus is on bankruptcy and restructuring law. I have 

authored, co-authored or edited several books on this topic, including Bankruptcy, Debt’s 

Dominion: A History of Bankruptcy Law in America, and When States Go Broke: The Origins, 

Context, and Solutions for the American States in Fiscal Crisis. I have written over fifty (50)

academic articles on issues related to bankruptcy and debt restructuring, including issues arising 

in bankruptcies of municipalities and sovereign entities. I have also written numerous short articles

and opinion pieces for newspapers and other similar publications, including The Wall Street 

Journal, The New York Times, and The Washington Post.

9. I have been a member of the American College of Bankruptcy since 2009. In 2016, 

I co-founded the University of Pennsylvania Institute for Restructuring Studies (the “Institute”). 

Among other things, the Institute hosts conferences and other events related to restructuring and 

offers resources to enhance the understanding of restructuring and bankruptcy. In June 2016, I 

was appointed by Chief Justice John Roberts to the Advisory Committee on Bankruptcy Rules.

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10. On June 30, 2016, President Obama signed into law PROMESA. I understand the 

primary goals of PROMESA are to meet Puerto Rico’s immediate need to provide its residents 

effective services, to formulate a debt restructuring, and to implement fiscal reform leading to a 

sustainable economy, fiscal responsibility, and access to the capital markets on reasonable terms. 

To achieve these goals, PROMESA established an independent entity within Puerto Rico’s 

government—the Oversight Board—as the sole representative of any debtor entity in a Title III 

case, with the exclusive authority to propose a plan of adjustment and the mandate to restore fiscal 

responsibility and market access to the Commonwealth of Puerto Rico (the “Commonwealth”) and 

its instrumentalities.

11. On August 31, 2016, I was one of seven (7) individuals appointed by President 

Barack Obama to serve on the Oversight Board for a term of three (3) years, and on January 6, 

2021, I was reappointed by President Donald J. Trump. On October 6, 2020, I was elected

Chairman of the Oversight Board. None of the members of the Oversight Board receive 

compensation for our service. 

12. As Chairman of the Oversight Board, I am responsible for, among other things: (i) 

overseeing the Oversight Board’s review, discussion, and certification of fiscal plans and annual 

budgets for the Commonwealth and its covered territorial instrumentalities, including HTA, as 

well as any plan of adjustment with respect to a Title III debtor; and (ii) participating, on behalf of 

the Oversight Board, in negotiations, mediations, and the debt restructuring processes for the 

Commonwealth and its covered territorial instrumentalities, including HTA. In this capacity, I 

received regular updates, presentations, and analyses from the Oversight Board’s advisors, in 

person or by telephone, including at the Oversight Board’s weekly sessions, as well as at meetings 

with smaller groups of Oversight Board members and one-on-one.

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13. Based on my experience as a member of the Oversight Board since August 31, 2016 

and as Chairman since October 6, 2020, I understand that, since its establishment, the Oversight 

Board has focused on achieving its mandates under PROMESA, including, among other things, 

providing a method for Puerto Rico to regain fiscal responsibility and access to capital markets. 

To accomplish this, the Oversight Board’s responsibilities include, without limitation, (i) the 

annual certification of fiscal plans and budgets for the Commonwealth, and covered

instrumentalities, such as HTA, pursuant to PROMESA Section 202, (ii) a review of executive and 

legislative acts to ensure compliance with certified fiscal plans and budgets, and PROMESA, and 

(iii) recommendations to the Governor or the Legislature with respect to actions the 

Commonwealth and its instrumentalities may take to ensure compliance with a certified fiscal plan, 

or to otherwise promote the financial stability, economic growth, management responsibility, and 

efficient delivery of government services to the people of the Commonwealth. The Oversight 

Board’s responsibilities also include, as the sole representative of a debtor pursuant to Title III of 

PROMESA, the filing of a plan of adjustment, which must satisfy certain criteria set forth in 

PROMESA, including that the plan be (i) feasible, (ii) in the best interests of creditors, and 

(iii) consistent with the applicable fiscal plan certified by the Oversight Board. 

14. Over the past several years, the Oversight Board has certified fiscal plans setting 

forth initiatives and reforms the Commonwealth and its agencies and instrumentalities must adopt 

to enable fiscal responsibility, to reduce Commonwealth spending while ensuring more efficient 

government services for the residents of the Island, to promote economic growth, and set Puerto 

Rico back on the path to prosperity. No solution to the Commonwealth’s (including HTA’s)

financial condition would be complete without addressing Puerto Rico’s unsustainable debt 

burden. Accordingly, in 2017, the Oversight Board commenced Title III cases for the 

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Commonwealth (the “Commonwealth Title III Case”), the Puerto Rico Sales Tax Financing 

Corporation, ERS, HTA (the “HTA Title III Case”), and the Puerto Rico Electric Power Authority, 

and, in 2019, for PBA. 

15. The Oversight Board already has accomplished several milestones towards 

achieving fiscal responsibility of the Commonwealth and its instrumentalities. These milestones

include, among other things, (i) restructuring the debt of the Government Development Bank for 

Puerto Rico (“GDB”) under Title VI of PROMESA, by approving GDB’s Qualifying Modification 

and modifying approximately $4 billion of GDB’s debt, (ii) restructuring the debt of COFINA 

pursuant to a plan of adjustment under Title III of PROMESA, which reduced COFINA’s debt by 

thirty-two percent (32%), and resulted in approximately $17.5 billion in debt service savings, (iii) 

restructuring the debt of the Puerto Rico Infrastructure Finance Authority (“PRIFA”) under Title 

VI of PROMESA, which eliminated approximately $1.9 billion of debt, (iv) restructuring the debt 

of the Puerto Rico Convention Center District Authority (“CCDA”) under Title VI of PROMESA,

which eliminated approximately $400 million of debt, and (v) restructuring the debt of the 

Commonwealth, ERS, and PBA pursuant to a joint plan of adjustment under Title III of 

PROMESA, which was confirmed by the Title III Court on January 18, 2022, and was substantially 

consummated on March 15, 2022, reducing the Commonwealth’s $30.5 billion of general 

obligation and guaranteed debt to approximately $7.4 billion, and eliminating all of ERS’s and 

PBA’s debt.

16. The Oversight Board continues to work toward Puerto Rico attaining fiscal 

responsibility, gaining access to capital markets on reasonable terms, and achieving renewed

economic prosperity and growth. I believe the HTA Plan represents a significant additional step 

towards achieving those goals. The HTA Plan was made possible by the Oversight Board’s 

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extensive negotiations with numerous claimholder constituencies. To date, the Oversight Board 

has executed agreements with multiple groups of claimholders, garnering support for the HTA 

Plan, including entering into agreements with: (i) certain holders and insurers of bonds issued by 

HTA (the “HTA Bonds,” and the holders of HTA Bonds, the “HTA Bondholders”); (ii) the Official 

Committee of Unsecured Creditors (the “UCC”), and (iii) the DRA Parties (as defined below).

The terms of these agreements are embodied and defined in multiple agreements, including the 

HTA/CCDA PSA, the DRA Stipulation, and the HTA Committee Agreement.

B. The Oversight Board’s Initial Actions to Fulfill PROMESA’s Mandate

17. As noted above, PROMESA was signed into law on June 30, 2016. As of the filing 

of the HTA Title III Case, HTA had approximately $4.3 billion in aggregate principal amount of 

outstanding HTA Bonds. Prior to the enactment of PROMESA, in 2010, HTA stopped issuing 

bonds, relying instead on GDB for liquidity and fiscal management support. HTA repeatedly drew 

on its lines of credit with GDB to fund its operational, working capital, and construction needs as 

well as ongoing deficits. As of June 30, 2021, the outstanding principal of these credit lines due to 

the Debt Recovery Authority (the holder of the loans following GDB’s restructuring pursuant to 

PROMESA Title VI) amounted to approximately $1.7 billion, plus accrued interest of roughly 

$0.9 billion. HTA has had insufficient resources to provide necessary services and meet the 

aforementioned obligations, while striving towards achievement of fiscal sustainability. 

18. Upon formation, the Oversight Board immediately (i) announced a process for the 

development, submission, approval, and certification of fiscal plans for the Commonwealth and 

for covered territorial instrumentalities, including HTA, (ii) designated an initial group of sixtythree (63) entities as covered entities under PROMESA, including the Commonwealth, HTA, 

GDB, ERS, the Judiciary Retirement System, the Teachers Retirement System, COFINA, the 

Puerto Rico Aqueduct and Sewer Authority (“PRASA”), PRIFA, PREPA, and PBA, (iii) requested 

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a significant amount of financial and budgetary information from the Commonwealth as a first 

step to developing improvements to the Government’s fiscal governance, accountability, internal 

controls, and financial affairs, and (iv) began developing selection criteria and processes for 

expediting certain critical energy and infrastructure projects. 

19. The Oversight Board has been and continues to be aware of the wide variety of 

stakeholders in the Commonwealth, as well as in HTA, and the multiple interested parties affected 

by its efforts toward fiscal responsibility. In an effort to gather information, understand concerns 

of the various constituencies, and begin progress towards a consensual resolution of Puerto Rico’s 

financial emergency, the Oversight Board commenced meetings with representatives of multiple 

groups of claim holders, including retirees, HTA Bondholders and insurers, public employee 

unions, the Retiree Committee, the UCC, the DRA Parties, and many others.

C. The Oversight Board’s Policy Reforms

20. The Oversight Board has included significant structural and governance reforms in 

the certified fiscal plans, enabling reinvestment into areas of highest need for the Commonwealth

and its instrumentalities, including HTA. For example, the HTA Fiscal Plan calls for HTA to 

pursue transportation sector reform by setting up a Toll Road Management Office, transferring 

over transit assets to the Puerto Rico Integrated Transit Authority, pursuing public-private 

partnership opportunities to access new sources of capital funding, and recruiting a new Board of 

Directors with four (4) of seven (7) members being independent and private positions. 

D. Actions Undertaken by the Oversight Board in Response to Natural Disasters 

and the COVID-19 Pandemic

21. In September 2017, Puerto Rico’s financial status, and the difficulties in improving 

it, worsened when the Island was devastated by Hurricanes Irma and Maria. Hurricanes Irma and 

Maria caused catastrophic destruction, leaving Puerto Rico completely without power, with many 

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streets and roads flooded, and homes and buildings throughout the Island without roofs or running 

water.

22. Acting in concert, the Government and the Oversight Board immediately undertook 

a series of actions to address this crisis. The Oversight Board provided the Government with the 

flexibility to reapportion up to $1 billion in budgeted expenditures to cover disaster-related 

expenses. Additionally, the Oversight Board sought the maximum amount of federal assistance, 

access to an emergency liquidity program, parity treatment for Medicaid funding, and waivers of 

caps and local share requirements for federal disaster assistance. The Oversight Board also 

(i) collaborated with the Government to provide short and medium term worst case liquidity 

estimates, (ii) participated in numerous meetings with members of Congress, Congressional staff, 

and federal agencies (including the Office of Management and Budget and the U.S. Treasury), and 

(iii) had dozens of informational meetings with reporters, think-tanks, and universities.

23. Unfortunately, Hurricanes Irma and Maria were only the first of several natural 

disasters that have plagued the Commonwealth’s recent history. On December 28, 2019, Puerto 

Rico experienced what was reported as a magnitude 4.7 earthquake—a harbinger of many 

significant earthquakes and aftershocks to follow. On January 6, 2020, according to reports, Puerto 

Rico was struck by a magnitude 5.8 earthquake, closely followed by a 6.4 magnitude tremblor the 

next day. On May 2, 2020, a 5.4 magnitude earthquake reportedly struck Puerto Rico’s 

southwestern coast. To help respond to these disasters, the Oversight Board authorized the 

additional use of emergency reserve funds, including the allocation of funds to effect repairs to the 

transportation system, which the certified fiscal plans established after the experience with 

Hurricanes Irma and Maria pointed to the need for emergency liquidity.

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24. While efforts to recover from these earthquakes were underway, Puerto Rico 

suffered a public health disaster when, on March 11, 2020, the World Health Organization declared 

COVID-19 a global pandemic. The Oversight Board acted swiftly—and in conjunction with the 

Government—to combat the pandemic. Making use of the available emergency reserve funds, the 

Oversight Board made an initial $5 million available to the Government to contain and mitigate 

COVID-19, and thereafter authorized the use of the balance of the $160 million emergency reserve 

fund to try and address the health and economic challenges created by this virus. On March 23, 

2020, the Government and the Oversight Board agreed to provide $787 million in additional 

financial support to those on the front line of the COVID-19 pandemic. This funding was used as 

a bridge to address the dire condition of the Commonwealth until the Federal Government 

established the Coronavirus Aid, Relief, and Economic Security Act.

E. The Oversight Board Certifies HTA Fiscal Plans

25. PROMESA provides for the creation of fiscal plans for the Commonwealth and its 

covered instrumentalities, such as HTA, which, in general terms, are intended to provide estimates 

of revenues and expenditures for the applicable entity for the period covered by the fiscal plan, 

among other statutory requirements. The Oversight Board is tasked with determining in its sole

discretion whether proposed fiscal plans comport with PROMESA section 201(b). Among 

PROMESA’s goals is that the fiscal plan provides Puerto Rico with permanent, pro-growth fiscal 

reforms, and a method to achieve fiscal responsibility and access to the capital markets. 

26. The Government submitted the first proposed fiscal plan for HTA on February 21, 

2017. After incorporating additional revisions and public commentary, the Oversight Board 

certified the first HTA fiscal plan on April 28, 2017. The certified HTA fiscal plan was based on 

the Government’s proposed fiscal plan with six (6) amendments added by the Oversight Board, 

which included the need for the public corporation to address the sustainability of HTA by asset, 

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and to adopt more aggressive fiscal and revenue enhancement measures of the transit system. 

Subsequent fiscal plans have been certified annually for HTA.

27. Over the years, the Oversight Board has worked diligently to facilitate the 

successful development and implementation of additional fiscal plans, structural reforms and fiscal 

measures, including for HTA, by engaging in at least the following actions: (i) monthly meetings 

with priority agencies to spur implementation progress; (ii) public reporting of the status of 

progress achieved in Government implementation plans and progress reports; (iii) utilizing 

readiness assessments based on best practices to provide a framework for agencies to track 

progress on implementation and understand the scope of the different milestones; (iv) conducting 

public hearings on implementation in areas of much needed transformation; and (v) milestone 

budgeting to incentivize implementation.

28. During the months following Hurricanes Irma and Maria, the Oversight Board 

collaborated with the Government to continue to develop new fiscal plans. The Oversight Board 

sought to re-certify the first filed HTA fiscal plan to account for the fundamental effects of the 

hurricanes on Puerto Rico. On April 20, 2018, the Oversight Board voted to certify a revised HTA 

fiscal plan, which provided a roadmap for transforming the highway and transit infrastructure 

system all across Puerto Rico to catalyze economic growth and combat the effects of the hurricane 

destruction. The revised HTA fiscal plan projected a total six (6)-year post-measure surplus of 

$355 million, based on several changes, including updated pre-measures financial information, toll 

increases, and personnel cost reductions on a level consistent with the rest of the Commonwealth. 

Over the past several years, the Oversight Board has certified further revised HTA fiscal plans to 

reflect new information, delays in implementation, updated financial projections, investments into 

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the infrastructure and construction of roads, highways, and related transportation facilities in 

Puerto Rico; and to account for additional natural disaster and public health crises. 

29. In 2019, Puerto Rico faced significant political turmoil culminating in the 

resignation of then-governor Rosselló. Just as the Island was recovering from political disruption 

and embarking on reconstruction at the end of 2019, Puerto Rico suffered the series of earthquakes 

and aftershocks described above, causing structural damage to the highway infrastructure across 

southwestern Puerto Rico. Only two months later, Puerto Rico (along with the rest of the world) 

was confronted with the global COVID-19 pandemic. Amidst the uncertainty, the Oversight Board 

represented a steady hand and worked diligently to address the economic and social impact of 

these events. Accordingly, on June 26, 2020 the Oversight Board certified a new fiscal plan for 

HTA (the “June 2020 HTA Fiscal Plan”) (Debtor’s Exhibit 3) [Case No. 17-BK-3567-LTS, ECF 

No. 1299-4], which I have read. Among other things, the June 2020 HTA Fiscal Plan reflected the 

substantial impacts of the 2020 earthquakes and COVID-19 pandemic on Puerto Rico’s highway 

infrastructure. Additionally, the June 2020 HTA Fiscal Plan required establishment of an 

independent board with experienced and knowledgeable directors, and six (6) measures to improve 

revenue, including, increases in toll fine collections, introduction of congestion pricing, as well as 

four (4) measures to cut health expenses, including reducing pension and employee healthcare

costs. The June 2020 HTA Fiscal Plan supported a total transformation of Puerto Rico’s 

transportation system to provide for a more productive, competitive, and resilient economic future 

for Puerto Rico’s transportation system.

30. As the COVID-19 pandemic continued to impact the world, on May, 27, 2021, the 

Oversight Board certified a new fiscal plan for HTA (the “May 2021 HTA Fiscal Plan”) (Debtor’s 

Exhibit 4) [Case No. 17-BK-3567-LTS, ECF No. 1299-5], which I have also read. The May 2021 

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HTA Fiscal Plan reflected new macroeconomic policy and technological developments, while 

accounting for the impacts of COVID-19 on Puerto Rico’s transportation system. Among other 

things, the May 2021 HTA Fiscal Plan introduced the Transportation Sector Reform, which lays

out key initiatives to address the underperformance of Puerto Rico’s transportation sector. The 

Transportation Sector Reform calls for HTA, as a key stakeholder in Puerto Rico’s transportation 

sector, to play a lead role in executing the necessary measures to enable the reform. The 

Transportation Sector Reform intends to reorganize transportation assets to improve overall 

efficiency and performance of transportation systems in Puerto Rico through measures that 

promote long-term sustainability. The May 2021 HTA Fiscal Plan also included measures that 

would enhance HTA’s revenues to ensure fiscal sustainability, such as, fare increases, toll 

optimization, fine price modifications, bi-directional tolling, transit enhancements, and ancillary 

revenue improvements. The fiscal measures described in the May 2021 HTA Fiscal Plan are 

critical to HTA’s long-term financial success and embody the need for HTA to optimize expenses, 

generate revenues, and support the transportation network for long term fiscal sustainability. 

31. More recently, on February 22, 2022, the Oversight Board again certified a new 

fiscal plan for HTA (the “February 2022 HTA Fiscal Plan”) (Debtor’s Exhibit 5) [Case No. 17-

BK-3567-LTS, ECF No. 1299-6]. Among other things, the February 2022 HTA Fiscal Plan (1) 

provides updates for new information, as well as fiscal measures that generate revenues and 

optimize expenses, including, (i) inflation-based increases on toll fares and fines, (ii) new 

electronic systems for toll collection, (iii) transit enhancements, and (iv) the re-assessment of Tren 

Urbano contracts and the reduction of healthcare expenses, and (2) presses HTA to implement

much-needed reform measures including, (a) implementing the Transportation Sector Reform, (b) 

transferring ownership of Tren Urbano to the Puerto Rico Integrated Transit Authority (“PRITA”), 

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(c) setting up a dedicated Toll Road Management Office, and (d) pursuing a Public-Private 

Partnership to access new sources of capital funding. 

F. The HTA Plan and Plan Settlement Agreements 

32. As described herein, following the filing of the HTA Title III Case, the Oversight 

Board, either directly or through its advisors, engaged in extensive mediation sessions under the 

guidance and direction of the Mediation Team (the “Mediation Team”)3

, and continued to 

negotiate directly with various constituencies, all in an effort to build support for the restructuring 

of Commonwealth and HTA debt. Eventually, those negotiations culminated in certain 

agreements with various stakeholders in furtherance of the successful implementation of the HTA 

Plan.

33. On May 5, 2021, the Oversight Board reached an agreement with certain holders 

and insurers of HTA Bonds and certain holders and insurers of CCDA Bonds, regarding the 

proposed treatment and settlement of, among other things, certain “clawback claims” against the 

Commonwealth (the “HTA/CCDA PSA” or the “HTA/CCDA Plan Support Agreement”)

(Debtor’s Exhibit 14) [Case No. 17-BK-3567-LTS, ECF No. 1299-16]. The HTA/CCDA PSA, 

among other things, (i) provides for a global resolution of disputes regarding the bondholders’ 

rights and alleged property interests in certain allocable “clawed back” revenues of the 

Commonwealth, (ii) provides for the issuance of new bonds and Contingent Value Instruments 

(“CVIs”), along with the payment of certain amounts in cash, resolving the bondholders’ claims 

against the Commonwealth, (iii) provides for $184.8 million in cash to holders of claims against 

HTA arising from or relating to the HTA 68 Bonds and $79.2 million in cash to holders of claims 

 3 The “Mediation Team” is the mediation team led by Judge Barbara J. Houser of the United States Bankruptcy Court 

for the Northern District of Texas (the “Mediation Team Leader”) as established by the Title III Court under its Order 

Appointing Mediation Team, dated June 23, 2017 [ECF No. 430].

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against HTA arising from or relating to HTA 98 Senior Bonds upon satisfaction of the HTA 

Distribution Conditions, (iv) resolves the outstanding disputes between the Commonwealth and 

the other parties to the HTA/CCDA PSA, (v) provides for the bondholders and insurers to support 

the HTA Plan, and (vi) provides an agreement regarding the structure of a potential plan of 

adjustment for HTA.

34. Following entry into the HTA/CCDA Plan Support Agreement, negotiations 

undertaken with the assistance and guidance of the Mediation Team between the Oversight Board 

and certain monoline insurers, Ambac and FGIC, continued. As a result of those negotiations, on 

July 15, 2021, Ambac and FGIC joined the HTA/CCDA Plan Support Agreement pursuant to 

separate Joinder Agreements to the HTA/CCDA Plan Support Agreement, subject to a right to 

terminate the HTA/CCDA Plan Support Agreement solely as to themselves, which right expired 

on July 26, 2021.

35. The HTA/CCDA Plan Support Agreement has the support of (i) over $700 million 

of the aggregate amount of HTA 68 Bond Claims, HTA 68 Bond Claims (Ambac), HTA 68 Bond 

Claims (Assured), and HTA 68 Bond Claims (National), and (ii) over $2.1 billion of the aggregate 

amount of HTA 98 Senior Bond Claims, HTA 98 Senior Bond Claims (Ambac), HTA 98 Senior 

Bond Claims (Assured), HTA 98 Senior Bond Claims (FGIC), and HTA 98 Senior Bond Claims 

(National).

36. On November 5, 2021, the Oversight Board reached an agreement with 

AmeriNational Community Services, LLC (as servicer for the GDB Debt Recovery Authority (the 

“DRA”)), and Cantor-Katz Collateral Monitor LLC (a Delaware limited liability company and as 

collateral monitor for Wilmington Trust, N.A.) (collectively, the “DRA Parties”), regarding the 

proposed treatment and settlement of, among other things, the DRA’s claims against HTA (the 

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“DRA Stipulation”) (Debtor’s Exhibit 16) [Case No. 17-BK-3567-LTS, ECF No. 1299-18]. The 

DRA Stipulation, among other things, provides for the DRA Parties to (i) support the HTA Plan 

and solicitation process, and (ii) vote to accept the HTA Plan. 

37. 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 (the “CW Confirmation Order”) (Debtor’s Exhibit 29)

[Case No. 17-BK-3567-LTS, ECF No. 1300-9], confirming the 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 (the “Commonwealth Plan”) (Debtor’s Exhibit 28) [Case No. 17-BK-3567-LTS, ECF 

No. 1300-8]. The Commonwealth Plan incorporated, among other things, the terms, provisions, 

and agreements for the settlement and compromise of various disputes relating to the 

Commonwealth as provided in the HTA/CCDA PSA and DRA Stipulation. On March 15, 2022, 

the Commonwealth Plan became effective.

38. On May 2, 2022, the Oversight Board filed the Title III Plan of Adjustment of the 

Puerto Rico Highways and Transportation Authority (the “Initial Plan”), the filing of which the 

Oversight Board certified pursuant to a resolution dated April 28, 2022 (Debtor’s Exhibit 18) [Case 

No. 17-BK-3567-LTS, ECF No. 1299-20]. The Initial Plan implemented the material terms 

outlined in the HTA/CCDA PSA and the DRA Stipulation as they relate to HTA. 

39. Following the filing of the Initial Plan, the Oversight Board continued to negotiate 

with various stakeholders, including the Creditors’ Committee, to generate further support for a 

plan of adjustment. On May 9, 2022, the Oversight Board reached an agreement with the Creditors’ 

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Committee, which provided for the terms of a recommended global settlement regarding the 

treatment of HTA General Unsecured Claims, including, among other things, the increase of the 

HTA GUC Recovery from $25 million to $48 million (the “HTA Committee Agreement”)

(Debtor’s Exhibit 15) [Case No. 17-BK-3567-LTS, ECF No. 1299-17]

40. On May 16, 2022, the Oversight Board filed the Amended Title III Plan of 

Adjustment of the Puerto Rico Highways and Transportation Authority [Case No. 17-3567, ECF 

No. 1177] (the “First Amended Plan”), the filing of which the Oversight Board certified pursuant 

to a resolution dated May 13, 2022 (Debtor’s Exhibit 19) [Case No. 17-BK-3567-LTS, ECF No. 

1299-21]. The First Amended Plan incorporated the material terms of the HTA Committee 

Agreement.

41. On June 7, 2022, the Oversight Board filed the Second Amended Title III Plan of 

Adjustment of the Puerto Rico Highways and Transportation Authority [Case No. 17-3567, ECF 

No. 1202] (the “Second Amended HTA Plan”), the filing of which the Oversight Board certified 

pursuant to a resolution dated June 7, 2022 (Debtor’s Exhibit 20) [Case No. 17-BK-3567-LTS, 

ECF No. 1299-22]. The Second Amended HTA Plan reflects other comments received from 

various parties in interest.

42. On June 17, 2022, the Oversight Board filed the Third Amended Title III Plan of 

Adjustment of the Puerto Rico Highways and Transportation Authority (Debtor’s Exhibit 1) [Case 

No. 17-3567, ECF No. 1299-1] (the “Third Amended HTA Plan”), the filing of which the 

Oversight Board certified pursuant to a resolution dated June 17, 2022 (Debtor’s Exhibit 21) [Case 

No. 17-BK-3567-LTS, ECF No. 1300-1]. The Third Amended HTA Plan reflects certain 

comments received from various parties in interest.

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43. On August 7, 2022, the Oversight Board filed the HTA Plan, the filing of which the 

Oversight Board certified pursuant to a resolution dated August 5, 2022 (Debtor’s Exhibit 59) 

[Case No. 17-BK-3567-LTS, ECF No. 1354-7].

44. Members of the Oversight Board, including me, participated in negotiations that 

led to the entry into the PSAs. In addition, the Oversight Board was represented in negotiations

of the PSAs by either its principal financial advisors, PJT Partners and Citigroup, and/or its legal 

counsel, Proskauer Rose LLP (“Proskauer”). The Oversight Board’s advisors made regular 

presentations to the Oversight Board in person or by telephone, including at its weekly sessions, 

as well as at meetings with smaller groups of Oversight Board members and one-on-one. I 

attended virtually all, if not all, of those group meetings and telephone conferences. These 

presentations updated the Oversight Board on how the key features of the negotiations were 

evolving over the course of the parties’ discussions. The Oversight Board also discussed the 

negotiations regarding the PSAs at additional strategy sessions.

45. At our regular meetings, the other members of the Oversight Board and I provided 

feedback to our advisors regarding our views concerning the appropriate structure for the PSAs 

and the ultimate terms of the agreements. The advisors incorporated that feedback into the 

proposals and counterproposals that were sent to the various PSA counterparties and, in most 

circumstances, the Court-appointed Mediation Team.

46. The Oversight Board and its advisors also discussed best and worst case scenarios 

for the outcome of pending and potential litigations brought by and against the Oversight Board 

and the Debtor. Our advisors, including Proskauer, provided us with assessments of the strengths 

and weaknesses of the arguments asserted or that could be asserted by various parties under 

PROMESA. Although the details of these analyses are privileged, I believe the Oversight Board’s 

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advisors provided me (and the other members of the Oversight Board) with the information needed 

to assess and understand the potential risks that litigation posed, including risks and expense of 

continued litigation to the Oversight Board’s overarching goals of HTA exiting Title III, achieving 

fiscal responsibility, and regaining access to the capital markets. The Oversight Board weighed 

all these factors against our strategic goals for HTA.

47. In Section III, below, I describe the details of the above-referenced settlements and 

why I believe they are fair and reasonable. 

II. The HTA Plan Complies with the Factual Requirements in PROMESA Section 

314(b)

48. I believe the HTA Plan complies with the factual requirements in PROMESA 

Section 314(b) discussed below, based on (a) my understanding of the HTA Plan, (b) the events 

that occurred throughout the Debtor’s Title III Case, and (c) various orders entered by the Title III 

Court during the Debtor’s Title III Case.

A. PROMESA § 314(b)(1): The HTA Plan Fully Complies with the Provisions of 

the Bankruptcy Code Made Applicable by PROMESA § 301

1. Bankruptcy Code Section 1122(a): Classification of Claims and 

Interests

49. Section 1122(a) of the Bankruptcy Code states a claim may be classified in a 

particular class if it is substantially similar to the other claims or interests in such class. In 

assessing this requirement, the Oversight Board considered many factors, including the security 

and priority of claims, in determining whether claims are substantially similar. 

50. The HTA Plan (Debtor’s Exhibit 58) [Case No. 17-BK-3567-LTS, ECF No. 1354-

6], provides for the separate classification of Claims in twenty (20) Classes. I believe such 

classifications comply with section 1122(a) of the Bankruptcy Code because Claims in each Class 

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are either all unsecured Claims or are all secured Claims secured by the same collateral.

Specifically, Article IV of the HTA Plan classifies the following twenty (20) Classes of Claims:

Claim Class

HTA 68 Bond Claims 1

HTA 68 Bond Claims (Ambac) 2

HTA 68 Bond Claims (Assured) 3

HTA 68 Bond Claims (National) 4

HTA 98 Senior Bond Claims 5

HTA 98 Senior Bond Claims (Ambac) 6

HTA 98 Senior Bond Claims (Assured) 7

HTA 98 Senior Bond Claims (FGIC) 8

HTA 98 Senior Bond Claims (National) 9

HTA 98 Sub Bond Claims 10

HTA 98 Sub Bond Claims (Assured) 11

HTA 98 Sub Bond Claims (FGIC) 12

HTA 98 Sub Bond Claims (National) 13

HTA Moscoso Bond Claims 14

Eminent Domain/Inverse Condemnation 

Claims 15

HTA General Unsecured Claims 16

HTA/GDB Claims 17

Section 510(b) Subordinated Claims 18

Convenience Claims 19

Federal Claims 20

Bond Claims (Classes 1-14).

51. To the extent Claims are separately classified, the reason for separate classification 

is never to gerrymander an accepting Class. Indeed, the PSAs provide the Debtor many accepting 

Classes. Rather, separate classification is used for governmental or business reasons usually 

requiring different treatment of separate Classes’ Claims. I understand that bond claims against 

HTA in Classes 1-14 are classified separately based on the seniority, and security claimed by 

holders of, different bond issuances and whether the bonds are insured and, if so, the insurer, as 

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follows: (a) bonds issued by HTA pursuant to Resolution No. 68-18, adopted June 13, 1968, as 

amended and supplemented thereafter (Classes 1-4), senior bonds issued by HTA pursuant to 

Resolution 98-06, adopted February 16, 1998 (Classes 5-9), subordinated bonds issued by HTA 

pursuant to Resolution 98-06, adopted February 16, 1998 (Classes 10-13), or Special Facility 

Revenue Refunding Bonds, 2003 Series A, issued by HTA pursuant to that certain Trust 

Agreement, dated as of October 1, 2003, between HTA and Banco Popular de Puerto Rico, as 

trustee (Class 14), and (b) whether the bonds are (i) uninsured (Classes 1, 5, 10, and 14), or (ii) 

insured by Assured Guaranty Corp. or Assured Guaranty Municipal Corp. (together, “Assured”) 

(Classes 3, 7, 11), National Public Finance Guarantee Corporation (“National”) (Classes 4, 9, and 

13), Financial Guaranty Insurance Company (“FGIC”) (Classes 8 and 12), or Ambac Assurance 

Corporation (“Ambac”) (Classes 2 and 6).

Eminent Domain/Inverse Condemnation Claims (Class 15).

52. The Claims held by eminent domain claimants are separately classified in Class 15. 

I understand those claimants assert constitutional Claims based upon an alleged seizure of property 

pursuant to HTA’s eminent domain power, and are partially secured by deposits submitted by HTA 

with the Clerk of the Court of First Instance in connection with condemnation proceedings 

underlying such Claims. The HTA Plan provides that these Claims will be treated as HTA General 

Unsecured Claims entitled to the same treatment as other holders of HTA General Unsecured 

Claims to the extent each allowable Claim exceeds the cash on deposit for it. However, the amount 

of the Claim in excess of the deposit, if any, will be paid in full upon entry of separate Final Orders 

(i) setting the amount of Allowed Claims for just compensation, and (ii) determining that such 

claims may not be impaired or discharged. These Claims are classified separately because the 

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treatment of this Class settles the claimholders’ Fifth Amendment Claims, which would entitle the 

Claims to payment if their Fifth Amendment argument were correct.

HTA General Unsecured Claims (Class 16).

53. Class 16 consists of Claims against HTA, other than those excluded pursuant to 

Section 1.194 of the HTA Plan, or otherwise treated in other Classes under the HTA Plan. I 

understand all Claims in Class 16 are unsecured and substantially similar to the other Claims in 

this Class.

HTA/GDB Claims (Class 17).

54. Class 17 consists of Claims against HTA with respect to loans extended by GDB 

to HTA, other than any Claims in Classes 1-14. These Claims are classified separately because, 

pursuant to the terms and provisions of the DRA Stipulation, the DRA, as holder of the HTA/GDB 

Claims, has agreed to receive no distribution on account of its HTA/GDB Claims.

Section 510(b) Subordinated Claims Class (Class 18). 

55. Class 18 consists of Claims determined pursuant to a Final Order to be subject to 

section 510(b) of the Bankruptcy Code. I understand section 510(b) of the Bankruptcy Code 

subordinates such Claims to other general unsecured claims, and that such Claims are only eligible 

to receive a recovery under the HTA Plan once all other unsecured creditors have been paid in full. 

Because they have a lower priority than general unsecured claims, they are sufficiently dissimilar 

to general unsecured claims to warrant separate classification and treatment. 

Federal Claims (Class 20).

56. Class 20 consists of Claims of the United States of America, its agencies, 

departments or agents, including, without limitation, the United States Department of Housing and 

Urban Development, the United States Department of Homeland Security, and the United States 

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Department of Labor. Due to the unique relationship of the Commonwealth and its 

instrumentalities, including HTA, with the federal government and its instrumentalities, as well as 

the long-term nature of many federal programs, it is reasonable and justified to classify such 

Federal Claims separately. 

2. Bankruptcy Code Section 1122(b)

57. Section 1122(b) of the Bankruptcy Code permits a plan to “designate a separate 

class of claims consisting only of every unsecured claim that is less than or reduced to an amount 

that the court approves as reasonable and necessary for administrative convenience.” Class 19 

contains a Class of “Convenience Claims,” consisting of Claims equal to or less than $20,000, or 

Claims which a given holder elected to reduce to $20,000 in accordance with the terms of the HTA 

Plan. In addition, any holder of multiple Claims in an aggregate amount of $40,000 or more may 

elect to reduce all such Claims to an aggregate amount of $40,000 and be treated within this Class. 

Given the extraordinarily large number of Claims asserted against HTA, I believe the separate 

classification of such “Convenience Claims” is reasonable and necessary to ease the administrative 

burden on HTA. I further believe it would be less costly simply to pay such Claims than it would 

to administer them through the claims reconciliation process. 

3. Bankruptcy Code Section 1123(a)(1)

58. Section 1123(a)(1) of the Bankruptcy Code requires a plan to designate certain 

claims, other than (as relevant here) those specified in section 507(a)(2), into separate classes in 

accordance with section 1122 of the Bankruptcy Code. As stated above, Article IV of the HTA 

Plan designates twenty (20) separate Classes of Claims for the Debtor and the claims in each such 

Class are substantially similar to other claims or interests within that Class. None of those twenty 

(20) separate Classes of Claims contain claims of the type described in section 507(a)(2) of the 

Bankruptcy Code. 

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4. Bankruptcy Code Section 1123(a)(2)

59. Section 1123(a)(2) of the Bankruptcy Code requires a plan to specify any class of 

claims unimpaired under the plan. The election to be treated as a Convenience Claim pursuant to 

Section 20.1(b) of the HTA Plan allows Holders of Allowed HTA General Unsecured Claims to 

reduce the amount of such holder’s Allowed Claim and accept the HTA Plan as a holder of a Claim 

in Class 19. Section 33.1 of the HTA Plan specifies that Claims in Classes 1, 2, 3, 4, 5, 6, 7, 8, 9, 

10, 11, 12, 13, 15, 16, 17, and 20 are impaired and will receive distributions pursuant to the HTA 

Plan, and that such Classes are entitled to vote to accept or reject the HTA Plan; provided, however, 

that, based upon the elections made on the Ballot/Election Form, Class 19 is deemed to have 

accepted the HTA Plan. Additionally, the Claims in Class 18 are impaired and not receiving a 

distribution pursuant to the HTA Plan and Class 18 is deemed to have rejected the HTA Plan. 

60. I also am aware that Section 33.2 of the HTA Plan specifies that Claims in Classes 

14 and 19 are unimpaired pursuant to the HTA Plan, are deemed to have accepted the HTA Plan 

and are not entitled to vote to accept or reject the HTA Plan. In sum, the HTA Plan specifies each 

unimpaired class of claims.

5. Bankruptcy Code Section 1123(a)(3)

61. Section 1123(a)(3) of the Bankruptcy Code requires a plan to specify the treatment 

of any class of claims impaired under the plan. I am aware that Articles V through XXIV of the 

HTA Plan identify the treatment of each Class of Claims impaired by the HTA Plan. 

6. Bankruptcy Code Section 1123(a)(4)

62. Section 1123(a)(4) of the Bankruptcy Code requires a plan to provide the same 

treatment for all claims in any given class, subject to a claimant agreeing to less favorable 

treatment. Articles V through XXIV of the HTA Plan provide that the treatment of each Claim in 

each particular Class is the same as the treatment of each other Claim in such Class, except to the 

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extent a holder of an Allowed Claim has agreed to less favorable treatment of its Claim. I therefore 

believe that all holders of Claims in each of the Classes receive the same treatment as holders of 

other Claims in the same Class pursuant to the HTA Plan.

63. Certain parties are receiving payment of Consummation Costs or Restriction Fees 

under the HTA Plan and in accordance with the HTA/CCDA Plan Support Agreement or the DRA 

Stipulation negotiated by the Oversight Board, as described further above. The Oversight Board is 

not awarding such costs and fees on account of the respective creditors’ Claims. Rather, (i) the 

Consummation Costs are provided in consideration of certain creditors’ assistance in the 

formulation of the HTA Plan for all creditors and to compensate them for the reasonable fees and 

expenses incurred in connection with the negotiation and execution of the HTA/CCDA Plan 

Support Agreement benefitting classes of creditors, which made development of the HTA Plan 

possible; and (ii) Restriction Fees are provided in connection with certain parties’ commitment to 

support the confirmation of the HTA Plan and, in connection therewith, to “lock up” their bonds 

pursuant to the terms of the HTA/CCDA Plan Support Agreement or the DRA Stipulation, as 

applicable. Because these fees are not being paid on account of the creditors’ Claims, but as 

consideration for actions taken by these creditors to create the HTA Plan benefitting all creditors, 

the Oversight Board believes these fees do not cause the Claims of the creditors receiving them to 

be treated differently than other Claims in each Class.

7. Bankruptcy Code Section 1123(a)(5)

64. Section 1123(a)(5) of the Bankruptcy Code requires a plan to provide adequate 

means for the plan’s implementation. Various provisions of the present HTA Plan provide 

adequate and proper means for its implementation. More specifically:

a. Article II provides for the terms of the operational restructuring of HTA 

consistent with the HTA 2022 Fiscal Plan;

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b. Article III provides for the payment of Administrative Expense Claims 

required to be paid on the later of the (i) HTA Plan Effective Date or (ii) 

the date on which an Administrative Expense Claim shall become an 

Allowed Claim;

c. Section 25.1 provides for the issuance and distribution of the New HTA 

Bonds;

d. Section 25.3 ensures the feasibility of the present HTA Plan by providing 

for the adoption and maintenance of a debt management policy “designed 

to ensure that certain past Debt issuance practices of HTA are not 

repeated;”

e. Section 27.1 provides, subject to Sections 27.5 and 27.7 of the HTA Plan, 

that “all Executory Contracts and Unexpired Leases that exist between 

the Debtor and any Entity, and which have not expired by their own terms 

on or prior to the HTA Effective Date, shall be deemed rejected by the 

Debtor as of the HTA Effective Date, except for any Executory Contract 

and Unexpired Lease (a) that has been assumed and assigned or rejected 

pursuant to an order of the Title III Court entered prior to the HTA 

Effective Date, (b) that is specifically designated as a contract or lease to 

be assumed or assumed and assigned on the schedules to the Plan 

Supplement, (c) that has been registered with the Office of the 

Comptroller of Puerto Rico, (d) that has been exempt from registration 

with the Office of the Comptroller of Puerto Rico pursuant to 2 L.P.R.A. 

§ 97 and regulations promulgated pursuant thereto, (e) has been approved 

by the Oversight Board or authorized by the Title III Court, unless 

specifically designated a contract to be rejected in the HTA Plan 

Supplement, (f) with the United States, or any of its agencies, 

departments or agents or pursuant to any federal program, or (g) by or 

between any Commonwealth agencies, departments, municipalities, 

public corporations or instrumentalities (other than leases to which PBA 

is a party) . . . .” 

f. Article XXVIII provides for distributions to be made to holders of all 

Allowed Claims under the HTA Plan;

g. Sections 1.51 and 29.1 provide for the authority to litigate and 

compromise and settle the Avoidance Actions to be transferred to the 

Avoidance Actions Trust on the HTA Effective Date and to be 

administered pursuant to the Avoidance Actions Trust Agreement;

h. Section 31.2 vests in the Disbursing Agent, among other things, the 

power to issue distributions contemplated by the HTA Plan;

i. Article XXXII provides for the Debtor to reconcile, and to the extent 

ultimately allowed, pay, any and all Disputed Claims;

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j. Article XXXVII provides that, “[o]n the HTA Effective Date, all matters 

provided for under the HTA Plan that would otherwise require approval 

of the directors of the Debtor or Reorganized HTA, including, without 

limitation, to the extent applicable, the authorization to issue or cause to 

be issued the New HTA Bonds, the authorization to enter into the 

Definitive Documents, the adoption of Reorganized HTA By-Laws, and 

the election or appointment, as the case may be, of directors and officers 

of Reorganized HTA pursuant to the HTA Plan, as applicable, shall be 

authorized and approved in all respects, in each case, in accordance with 

the New HTA Bonds Indenture, and the new corporate governance 

documents, as applicable, and without further action by any Entity under 

any other applicable law, regulation, order, or rule. Other matters 

provided under the HTA Plan involving the corporate structure of 

Reorganized HTA or corporate action by Reorganized HTA, as 

applicable, shall be deemed to have occurred, be authorized, and shall be 

in effect in accordance with the New HTA Bonds Indenture, and the new 

corporate governance documents, as applicable, and without requiring 

further action by any Entity under any other applicable law, regulation, 

order, or rule;” and

k. Section 41.1 provides for the re-vesting of assets: “[e]xcept as provided 

in the HTA Confirmation Order, on the HTA Effective Date, title to all 

Assets and properties of the Debtor encompassed by the HTA Plan shall 

vest in Reorganized HTA, free and clear of all Liens, including, without 

limitation, any Lien upon or security interest in the SIB Account, but 

expressly excluding Liens granted pursuant to the HTA Plan and the 

HTA Confirmation Order.”

65. Additionally, I have reviewed the documents included in the Plan Supplement 

(Debtor’s Exhibit 60) [Case No. 17-BK-3567-LTS, ECF No. 1354-8]. It contains substantially 

final forms of: (a) the New HTA Bonds Indenture, (b) Amended and Restated Avoidance Actions 

Trust Agreement, (c) Schedule of Executory Contracts and Unexpired Leases to be Assumed, (d) 

Ambac Custodial Trust Documents, (e) Assured Custodial Trust Documents, (f) FGIC Trust 

Documents, (g) Initial Board of Directors of Reorganized HTA, (h) First Supplemental Trust 

Agreement (New HTA Bonds), and (i) Second Supplemental Trust Agreement (Subordinated 

Indebtedness). I believe that the HTA Plan, together with the documents and arrangements set 

forth in the Plan Supplement, provides adequate means for its implementation. 

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8. Bankruptcy Code Section 1123(b)(1)

66. Section 1123(b)(1) of the Bankruptcy Code permits a plan to impair or leave 

unimpaired any class of claims. Article XXXIII of the HTA Plan identifies which Classes of 

Claims are impaired and which Classes of Claims are left unimpaired.

9. Bankruptcy Code Section 1123(b)(2)

67. Section 1123(b)(2) of the Bankruptcy Code permits a plan to provide for the 

assumption, rejection, or assignment of any executory contract or unexpired lease not previously 

rejected. Article XXVII of the HTA Plan provides that, “all Executory Contracts and Unexpired 

Leases that exist between the Debtor and any Entity, and which have not expired by their own 

terms on or prior to the HTA Effective Date, shall be deemed rejected by the Debtor as of the HTA 

Effective Date, except for any Executory Contract and Unexpired Lease (a) that has been assumed 

and assigned or rejected pursuant to an order of the Title III Court entered prior to the HTA 

Effective Date, (b) that is specifically designated as a contract or lease to be assumed or assumed 

and assigned on the schedules to the Plan Supplement, (c) that has been registered with the Office 

of the Comptroller of Puerto Rico, (d) that has been exempt from registration with the Office of 

the Comptroller of Puerto Rico pursuant to 2 L.P.R.A. § 97 and regulations promulgated pursuant 

thereto, (e) has been approved by the Oversight Board or authorized by the Title III Court, unless 

specifically designated a contract to be rejected in the Plan Supplement, (f) with the United States, 

or any of its agencies, departments or agents or pursuant to any federal program, or (g) by or 

between any Commonwealth agencies, departments, municipalities, public corporations or 

instrumentalities (other than leases to which PBA is a party); provided, however, that the Debtor 

reserves the right, on or prior to the HTA Effective Date, to amend such schedules to delete any 

Executory Contract and Unexpired Lease therefrom or add any Executory Contract and Unexpired 

Lease thereto, in which event such Executory Contract(s) and Unexpired Lease(s) shall be deemed 

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to be, as the case may be, either rejected, assumed, or assumed and assigned as of the HTA 

Effective Date.” HTA Plan § 27.1. 

10. Bankruptcy Code Section 1123(b)(3)(A)

68. Section 1123(b)(3)(A) of the Bankruptcy Code permits a plan to provide for the 

settlement or adjustment of any claim belonging to the debtor. As described further below, the 

Commonwealth Plan, as well as the PSAs, set forth the terms and conditions for a global 

compromise and integrated settlement of, among other issues, asserted and unasserted disputes 

concerning the rights of holders of HTA 68 Bond Claims and HTA 98 Bond Claims including the 

disputes: (a) raised by certain holders of CW Bond Claims, CW Guarantee Bond Claims, and 

GDB HTA Loans asserting rights to receive revenues historically conditionally appropriated to 

HTA, as applicable, and “clawed back” by the Commonwealth pursuant to the provisions of the 

Commonwealth Constitution, (b) relating to the validity, priority, secured status and related rights 

attendant to the GDB HTA Loans, and (c) raised by the Lift Stay Motions and the Clawback 

Actions relating to the CW/HTA Claims and certain holders’ asserted security interest in toll and 

fine revenues collected by HTA. The settlement and compromise of such issues as they relate to 

the Commonwealth have been approved pursuant to the confirmation of the Commonwealth Plan 

on January 18, 2022. I believe such settlements and compromises are in the best interests of the 

Debtor and its creditors, and well within the range of reasonableness. 

11. Bankruptcy Code Section 1123(b)(3)(B)

69. Section 1123(b)(3)(B) of the Bankruptcy Code permits a plan to provide for the 

retention and enforcement by the debtor, the trustee, or by a representative of the estate appointed 

for such purpose, of any claim belonging to the debtor. Section 1.51 references the Avoidance 

Actions Trust, dated March 15, 2022, entered into by the Commonwealth in connection with the 

consummation of the Commonwealth Plan. This section provides that, on the HTA Effective Date,

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the authority to litigate or compromise and settle the Avoidance Actions, relating to HTA, will be 

transferred to the Avoidance Actions Trust, established by the Commonwealth Plan.

70. Further, Section 29.1 of the HTA Plan provides that: “[e]xcept as settled and 

released herein, from and after the HTA Effective Date, the Avoidance Actions Trustee shall have 

the exclusive right and power to (a) litigate any and all of the Avoidance Actions and (b) 

compromise and settle such Avoidance Actions, upon approval of the Title III Court.”

71. Section 32.1(a) of the HTA Plan further provides that: “[e]xcept with respect to 

Allowed Claims, and subject to the terms and conditions of the ADR Procedures and the ADR 

Order, Reorganized HTA, by and through the Oversight Board, and in consultation with AAFAF, 

shall object to, and shall assume any pending objection filed by the Debtor to, the allowance of 

Claims filed with the Title III Court with respect to which it disputes liability, priority or amount, 

including, without limitation, objections to Claims that have been assigned and the assertion of the 

doctrine of equitable subordination with respect thereto. All objections, affirmative defenses and 

counterclaims shall be litigated to Final Order; provided, however, that Reorganized HTA, by and 

through the Oversight Board, and in consultation with AAFAF, shall have the authority to file, 

settle, compromise or withdraw any objections to Claims, without approval of the Title III Court.”

72. Based on the foregoing provisions, I believe the HTA Plan provides for the 

retention and enforcement by the Debtor or an assigned estate representative of all claims and 

interests.

12. Bankruptcy Code Section 1123(b)(4)

73. Section 1123(b)(4) of the Bankruptcy Code permits a plan to provide for the sale 

of all or substantially all of the property of the estate, and the distribution of the proceeds of such 

sale among claim holders. The HTA Plan does not provide for the sale of all or substantially all of 

the property of HTA, but instead, provides for HTA to undergo an operational restructuring. 

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Section 2.4 provides for timely operational restructuring of HTA through the separation of 

Highway Assets from the Transit Assets, with such Transit Assets and all Transit Revenues being 

transferred to PRITA.

13. Bankruptcy Code Section 1123(b)(5)

74. Section 1123(b)(5) of the Bankruptcy Code permits a plan to modify the rights of 

claimholders. Articles V through XXIV of the HTA Plan modify the rights of holders of Claims 

in the Impaired Classes, and leave intact those holders of Claims in the Unimpaired Classes. 

14. Bankruptcy Code Section 1123(b)(6)

75. Section 1123(b)(6) of the Bankruptcy Code permits a plan to include any other 

provision not inconsistent with the Bankruptcy Code. Article XLI of the HTA Plan provides for, 

among other things, (a) certain releases, injunctions, and exculpations, and (b) an exemption from 

registration pursuant to Bankruptcy Code section 1145 for the issuance and distribution of the New 

HTA Bonds. I am unaware of any facts rendering Article XLI inconsistent with any requirements 

in the Bankruptcy Code. 

15. Bankruptcy Code Section 1123(d)

76. Section 1123(d) of the Bankruptcy Code requires a plan that proposes to cure a 

default to do so in accordance with the underlying agreement and applicable nonbankruptcy law. 

Section 27.4 of the HTA Plan provides for the payment of cure amounts required to be paid to the 

counterparties of Executory Contracts and Unexpired Leases assumed, or assumed and assigned 

under the HTA Plan. I am aware that any cure amounts will be determined in accordance with the 

underlying agreements and applicable nonbankruptcy law, and pursuant to the procedures 

established by the HTA Plan.

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16. Bankruptcy Code Section 1129(a)(2)

77. Section 1129(a)(2) of the Bankruptcy Code requires the proponent of a plan to 

comply with applicable provisions of the Bankruptcy Code. To the best of my knowledge and 

belief, based on my experience and involvement in the process culminating in the HTA Plan, as 

well as the plan process associated with the Commonwealth Plan, the HTA/CCDA PSA, the DRA 

Stipulation, and the HTA Committee Agreement, the Debtor has complied with all statutory 

requirements in the Bankruptcy Code as shown by (i) the outcomes of each action brought by 

creditors to enforce against the Oversight Board requirements in the Bankruptcy Code, and (ii) the 

actions taken by the Oversight Board to procure approval of the Disclosure Statement and 

confirmation of the HTA Plan. For instance, the Oversight Board, with the assistance of its 

professionals, and in coordination with AAFAF, expended significant time and effort preparing 

the Disclosure Statement and sought and received input and comment thereon from parties to the 

PSAs, and all other parties in interest. This Court approved the Disclosure Statement as containing 

adequate information and meeting the requirements of section 1125 and 1126 of the Bankruptcy 

Code. Likewise, the Oversight Board will be proffering at the confirmation hearing evidence that 

the Debtor properly solicited and tabulated votes with respect to the HTA Plan. 

17. Bankruptcy Code § 1129(a)(3)

78. Section 1129(a)(3) of the Bankruptcy Code requires a plan to be proposed in good 

faith and not by any means forbidden by law. The HTA Plan was proposed by the Oversight Board 

in good faith, and with the legitimate and honest purpose, consistent with its statutory mandate 

under PROMESA, of providing a method for HTA to achieve fiscal responsibility and access to 

capital markets. As discussed in great detail in Section I above, the HTA Plan (including the 

settlements and compromises contained therein) is the result of extensive, arms’-length 

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negotiations among certain constituencies through the independent mediation process developed 

and guided by the Mediation Team, and direct settlement negotiations. 

79. The HTA Plan put forth for confirmation is the fourth amended version of the plan 

of adjustment because the Oversight Board has worked tirelessly since this Title III Case began, 

with the assistance of its legal and financial advisors, to develop consensus with creditors and to 

evaluate HTA’s current and future financial circumstances. These circumstances have been subject 

to constant change as the Oversight Board, HTA, creditors, and the people of Puerto Rico have 

fought to address the Island’s needs and develop a path to fiscal responsibility in the midst of 

multiple major hurricanes, earthquakes, and other natural disasters, as well as the impact of the 

global COVID-19 pandemic.

80. The HTA Plan is the culmination of all of these efforts and is designed to implement 

the settlement and compromise of numerous risky and costly disputes (and further the settlements 

and compromises that have been approved in connection with the Commonwealth Plan), while 

avoiding protracted litigation that could delay distributions to creditors. 

18. Bankruptcy Code Section 1129(a)(6)

81. Section 1129(a)(6) of the Bankruptcy Code requires any rate changes provided for 

under the plan to be approved by any governmental regulatory commission with jurisdiction. The 

HTA Plan contemplates certain toll rate increases; however, I understand that such increases do 

not require the approval of any governmental regulatory commission with jurisdiction over HTA 

and such toll rate increases.

19. Bankruptcy Code Section 1129(a)(8)

82. Section 1129(a)(8) of the Bankruptcy Code requires each class of claims to either 

accept the plan or to be unimpaired thereunder unless section 1129(b) of the Bankruptcy Code is 

applied to a rejecting class. It is my understanding based on preliminary voting results reported to 

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me by Kroll Restructuring Administration, LLC (“Kroll”) that Classes 15 and 16 are impaired 

under the HTA Plan and have voted to reject the HTA Plan (collectively, the “Cramdown 

Classes”). For these Cramdown Classes, the Oversight Board will request confirmation pursuant 

to section 1129(b) of the Bankruptcy Code.

20. Bankruptcy Code Section 1129(a)(10)

83. Section 1129(a)(10) of the Bankruptcy Code requires that at least one class of 

claims that is impaired by the plan has accepted the plan. At least one Class of impaired claims 

will be proven to have accepted the HTA Plan. It is reported to me by Kroll, and will be proven 

at the confirmation hearing that, as of August 7, 2022, the following Classes have voted in the 

listed amount and number to accept the HTA Plan:

Class Claim

Number

Voting to Approve 

(%)

Amount

Voting to Approve 

(%)

1 HTA 68 Bond Claims 95.76% 99.80%

2 HTA 68 Bond Claims (Ambac) 100% 100%

3 HTA 68 Bond Claims (Assured) 100% 100%

4 HTA 68 Bond Claims (National) 100% 100%

5 HTA 98 Senior Bond Claims 94.68% 99.83%

6 HTA 98 Senior Bond Claims (Ambac) 100% 100%

7 HTA 98 Senior Bond Claims (Assured) 100% 100%

8 HTA 98 Senior Bond Claims (FGIC) 100% 100%

9 HTA 98 Senior Bond Claims (National) 100% 100%

10 HTA 98 Sub Bond Claims 93.67% 98.41%

11 HTA 98 Sub Bond Claims (Assured) 100% 100%

12 HTA 98 Sub Bond Claims (FGIC) 100% 100%

13 HTA 98 Sub Bond Claims (National) 100% 100%

14 HTA Moscoso Bond Claims Deemed to Accept

15 Eminent Domain/Inverse Condemnation 

Claims

50% 50%

16 HTA General Unsecured Claims 38.46% 99.79%

17 HTA/GDB Claims 100% 100%

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Class Claim

Number

Voting to Approve 

(%)

Amount

Voting to Approve 

(%)

18 Section 510(b) Subordinated Claims Deemed to Reject

19 Convenience Claims Deemed to Accept

20 Federal Claims No Ballots Received - Deemed to Accept

21. Bankruptcy Code Section 1129(b)(1)

84. Section 1129(b)(1) of the Bankruptcy Code provides that, if all of the applicable 

requirements of section 1129(a) are met with the exception of section 1129(a)(8), the Court is 

required to confirm the plan so long as such plan does not discriminate unfairly, and is fair and 

equitable, with respect to each impaired class of claims that has not accepted the plan. As 

described further above, I understand that the HTA Plan does not comply with section 1129(a)(8) 

of the Bankruptcy Code with respect to the Cramdown Classes, but believe that the HTA Plan 

remains confirmable under this section. As described in further detail below, the HTA Plan is fair 

and equitable with respect to holders of Claims in the Cramdown Classes.

22. Bankruptcy Code Section 1129(b)(2)

85. Section 1129(b)(2) of the Bankruptcy Code provides an impaired class of claims is 

treated fairly and equitably if (i) such class is secured and either (a) retains the liens securing such 

claims and receives deferred cash payments totaling at least the allowed amount of such claims, 

(b) the property subject to such liens is sold, with the liens attaching to the proceeds of such sale, 

or (c) such class receives the indubitable equivalent of its claims; or (ii) such class is unsecured 

and (a) receives property of a value equal to allowed amount of such claim, or (b) no class of 

claims that is junior to such class receives or retains property under the plan. I understand the 

Eminent Domain/Inverse Condemnation Claims will be treated as HTA General Unsecured Claims 

entitled to the same treatment as other holders of HTA General Unsecured Claims to the extent 

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each allowable Claims exceeds the cash on deposit for it. However, the amount of the Claim in 

excess of the deposit, if any, will be paid in full upon entry of separate Final Orders (i) setting the 

amount of Allowed Claims for just compensation, and (ii) determining that such claims may not 

be impaired or discharged. 

86. Additionally, no class of junior Claims will receive distributions under the HTA 

Plan and no class of senior Claims will receive more than one hundred percent (100%) on account 

of such Claims.

B. PROMESA § 314(b)(2): The HTA Plan Fully Complies with the Provisions in 

Title III of PROMESA

87. PROMESA section 314(b)(2) requires the HTA Plan to comply with the provisions 

in Title III. The Oversight Board has strived to comply with every provision of Title III since it 

commenced HTA’s Title III Case and evidence of such compliance is contained in the declarations 

being submitted in respect of confirmation, and any other evidence offered at the confirmation 

hearing will be referenced in the arguments of counsel.

C. PROMESA § 314(b)(3): The Debtor is Not Prohibited By Law From Taking 

Any Action Necessary to Carry Out the HTA Plan

88. PROMESA section 314(b)(3) requires that a debtor not be prohibited by law from 

taking any action necessary to carry out the HTA Plan. To the best of my knowledge, the HTA 

Plan contains no provisions that would require it to violate Commonwealth law that is not 

preempted. For instance, I believe virtually all jurisdictions have laws mandating payment in full 

of all lawful obligations. But reorganization plans paying creditors less than in full are routinely 

confirmed because the local laws to the contrary are necessarily preempted. The Oversight Board 

does not believe local legislation is required to issue debt under a Title III plan of adjustment, and 

the currently proposed Title III plan of adjustment does not require such legislation.

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D. PROMESA Section 314(b)(4): The HTA Plan Provides Each Holder of an 

Administrative Claim Cash, Equal to the Allowed Amount of Such Claim, on 

the Effective Date

89. PROMESA section 314(b)(4) provides, except to the extent that the holder of a 

particular claim has agreed to a different treatment of such claim, a plan must provide that, on its 

effective date, each holder of a claim specified in Bankruptcy Code section 507(a)(2), which I 

understand is an administrative expense claim, will receive on account of such claim cash equal to 

the allowed amount of such claim. Section 3.1 of the HTA Plan provides that: “[o]n the later to 

occur of (a) the HTA Effective Date and (b) the date on which an Administrative Expense Claim 

shall become an Allowed Claim, Reorganized HTA shall (i) pay to each holder of an Allowed 

Administrative Expense Claim, in Cash, the full amount of such Administrative Expense Claim or 

(ii) satisfy and discharge such Allowed Administrative Expense Claim in accordance with such 

other terms no more favorable to the claimant than as may be agreed upon by and between the 

holder thereof and Reorganized HTA; provided, however, that Allowed Administrative Expense 

Claims representing indebtedness incurred in the ordinary course prior to the HTA Effective Date 

by the Debtor shall be paid in full and performed by Reorganized HTA in accordance with the 

terms and subject to the conditions of any agreement governing, investment evidencing, or other 

document relating to such transactions, including, without limitation, all obligations of HTA and 

Reorganized HTA with respect to payment of the Commonwealth Loan; and, provided, further, 

that, with respect to the Commonwealth Loan, the repayment thereof shall be satisfied in 

accordance with the terms and provisions of the New HTA Bonds Indenture; and, provided, 

further, that, if any such ordinary course expense is not billed, or a written request for payment is 

not made, within one hundred fifty (150) days after the HTA Effective Date, such ordinary course 

expense shall be barred and the holder thereof shall not be entitled to, or receive, a distribution 

pursuant to the HTA Plan.” As provided for by the HTA Plan, certain Consummation Costs, and 

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Restriction Fees shall be paid in Cash on the Effective Date of the HTA Plan. All other Allowed 

Administrative Expense Claims, if any, will likewise be paid pursuant to the terms of Section 3.1 

of the HTA Plan. 

E. PROMESA § 314(b)(5): The HTA Plan Has Obtained All Necessary 

Legislative, Regulatory, and Electoral Approvals

90. PROMESA section 314(b)(5) requires any legislative, regulatory, or electoral 

approval necessary under applicable law to carry out any provision of the HTA Plan to either have 

been obtained, or be required as a condition to implementing such provision. As discussed above, 

legislative, regulatory, and electoral approvals are not required in order for HTA to raise toll rates 

and fares, or issue the New HTA Bonds.

F. PROMESA § 314(b)(6): The HTA Plan Is Feasible for HTA

91. PROMESA section 314(b)(6) requires the HTA Plan be feasible and in the best 

interests of creditors. I understand that, to make the best interests determination, the Court must 

consider whether creditors would receive under non-bankruptcy laws and the Puerto Rico 

Constitution a greater recovery than is provided under the HTA Plan. The Disclosure Statement 

contains the Oversight Board’s best interest analysis, and a witness from McKinsey will testify to 

it at the confirmation hearing. In addition, a witness from Citigroup Global Markets Inc. (“Citi”)

will testify as to the HTA Plan’s feasibility with respect to HTA. I believe the HTA Plan is feasible 

as to HTA for the following reasons: (i) HTA has the resources and liquidity necessary to make 

the payments on the HTA Effective Date which it is required to make; (ii) the HTA Plan reduces 

HTA’s debt to an amount which the February 2022 HTA Fiscal Plan projects HTA will be able to 

pay; (iii) the HTA Plan and New HTA Bonds Indenture, which I have reviewed, include multiple

provisions, including the Toll Rate Covenant, which, along with a significant cash reserve HTA 

will maintain for contingencies, are designed to ensure HTA can cover projected debt obligations; 

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(iv) HTA will be able to pay the HTA Moscoso Bonds; and (v) HTA’s operating revenues, as well 

as projected appropriations from the Commonwealth in accordance with the Commonwealth 2022

Fiscal Plan, are sufficient to cover HTA’s maintenance and operating expenses and other required 

disbursements. I understand that, to the extent the Oversight Board certifies a revised fiscal plan 

for HTA prior to the occurrence of the HTA Effective Date, such revised fiscal plan for HTA will 

conform with the transactions contemplated in the HTA Plan.

G. PROMESA § 314(b)(7): The HTA Plan Is Consistent with the Applicable 

Fiscal Plan Certified by the Oversight Board Under Title III

92. Section 314(b)(7) of PROMESA requires a plan of adjustment to be consistent with 

the applicable fiscal plan as certified by the Oversight Board pursuant to Title II. The Oversight 

Board has oversight responsibility for Puerto Rico’s fiscal plans under Title II of PROMESA. 

PROMESA contemplates the Oversight Board and the Government will work together to adopt a 

fiscal plan, but grants the Oversight Board the power to develop and certify its own fiscal plan if 

the Government does not provide it with a proposed fiscal plan it determines to certify.

93. On February 22, 2022, the Oversight Board certified the February 2022 HTA Fiscal 

Plan, which (1) provides updates for new information, as well as fiscal measures that generate 

revenues and optimize expenses, including, (i) inflation-based increases on toll fares and fines, (ii) 

new electronic systems for toll collection, (iii) transit enhancements, and (iv) the re-assessment of 

Tren Urbano contracts and the reduction of healthcare expenses, and (2) presses HTA to implement 

much-needed reform measures including, (a) pursuing the Transportation Sector Reform, (b) 

transferring ownership of Tren Urbano to PRITA, (b) setting up a dedicated Toll Road 

Management Office, and (c) pursuing a P3 to access new sources of capital funding.

94. Similarly, as part of the Title III process, Section 104(j)(2) of PROMESA requires 

the Oversight Board to certify the submission or modification of the HTA Plan. Section 104(j)(3) 

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of PROMESA provides that the Oversight Board may certify the filing of the HTA Plan only if it 

determines, in its sole discretion, that the HTA Plan is consistent with the February 2022 HTA 

Fiscal Plan. On August 5, 2022, the Oversight Board certified submission of the HTA Plan 

Debtor’s Exhibit 58 [Case No. 17-BK-3567-LTS, ECF No. 1354-6].

95. During the certification process for the HTA Plan and the February 2022 HTA 

Fiscal Plan, the Oversight Board’s advisors made regular presentations to the Oversight Board in 

person, by telephone, or virtually, including at its weekly sessions, as well as at meetings with 

smaller groups of Oversight Board members and one-on-one. These presentations updated the 

Oversight Board on how the key features of the HTA Plan and the February 2022 HTA Fiscal Plan 

were evolving during their development. The Oversight Board also conducted separate strategy 

sessions to discuss the HTA Plan and the February 2022 HTA Fiscal Plan.

96. Based on my review of both the HTA Plan (Debtor’s Exhibit 58) [Case No. 17-BK3567-LTS, ECF No. 1354-6] and the February 2022 HTA Fiscal Plan (Debtor’s Exhibit 5) [Case 

No. 17-BK-3567-LTS, ECF No. 1299-6], I believe that the HTA Plan is consistent with the 

February 2022 HTA Fiscal Plan. Nothing contained in the HTA Plan would violate or otherwise 

interfere with the February 2022 HTA Fiscal Plan. The debt levels under the HTA Plan are 

consistent with the debt levels set forth in the February 2022 HTA Fiscal Plan. I understand that, 

to the extent any provision of the HTA Plan may be inconsistent with the February 2022 HTA 

Fiscal Plan, the Oversight Board intends to certify a revised fiscal plan for HTA to conform with 

the transactions contemplated in the HTA Plan prior to the occurrence of the HTA Effective Date.

H. Bankruptcy Rule 3019: The Plan Does Not Adversely Change the Treatment 

of Claims of Creditors.

97. The Oversight Board filed the HTA Plan on August 7, 2022, after the Voting 

Deadline had passed. Based on my review of the HTA Plan and updates provided to the Oversight 

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Board by its advisors, I understand that the HTA Plan contains technical changes that do not 

adversely affect the treatment of any Claims and do not materially or adversely modify the 

treatment to be afforded to creditors pursuant to the Third Amended HTA Plan.

III. The Plan Settlement Agreements

98. Following the filing of the Commonwealth and HTA Title III Cases, the Oversight 

Board, either directly or through its advisors, engaged in extensive mediation sessions under the 

guidance and direction of the Mediation Team, and continued to negotiate directly with various 

constituencies, all in an effort to build support for the restructuring of Commonwealth and HTA 

debt, among others. I participated in many of the negotiation and mediation sessions on behalf of 

the Oversight Board. And, for those I did not attend personally, I received real-time detailed 

reporting of what transpired from either the former Executive Director, Natalie Jaresko, the 

Oversight Board’s advisors, or both. As described above, these mediation sessions culminated in 

the execution of the HTA/CCDA Plan Support Agreement. In addition to the HTA/CCDA Plan 

Support Agreement, the Oversight Board reached an agreement with the DRA and executed the 

DRA Stipulation.

99. Execution of the HTA/CCDA Plan Support Agreement and the DRA Stipulation 

led directly to the development and filing of the Initial Plan, which was filed on May 2, 2022. The 

Initial Plan embodied the terms of the HTA/CCDA Plan Support Agreement and the DRA 

Stipulation, providing a path for HTA to emerge from Title III.

100. Following the filing of the Initial Plan, the Oversight Board continued to negotiate 

with various stakeholders, including the Creditors’ Committee, to generate further support for a 

plan of adjustment. Those negotiations culminated in the entry into the HTA Committee 

Agreement and the filing of the First Amended Plan incorporating the terms of such agreement. 

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Following additional discussions with various parties in interest, the Oversight Board filed the 

Second Amended HTA Plan and the Third Amended HTA Plan.

101. I have read the HTA/CCDA Plan Support Agreement and the DRA Stipulation, and 

since I participated in many mediation sessions or other negotiations in which they were 

developed, and agreed with approving the Oversight Board’s execution of them, I am generally 

familiar with their respective business terms. I describe in general terms below (i) the key disputes 

and litigation resolved by each agreement, (ii) the key terms of each agreement, including the 

consideration provided in exchange for (a) resolution of the relevant litigation and (b) support for 

the HTA Plan, and (iii) why I believe payment of the Consummation Costs and Restriction Fees

as contemplated in the Plan Support Agreements, and incorporated into the HTA Plan, is fair, 

reasonable and necessary to compensate the parties to the Plan Support Agreement for the 

development of the terms of the HTA Plan and to achieve a global consensual restructuring in the 

HTA Title III Case.

A. HTA/CCDA PSA

1. Existing Disputes and Litigation Resolved by the HTA/CCDA PSA

102. The Oversight Board, acting as the Title III representative of the Commonwealth 

and, where applicable, HTA, has engaged in various disputes and litigations with HTA 

Bondholders, the fiscal agent for the HTA Bonds, and monoline insurers of HTA Bonds relating 

to claims against (i) HTA own source revenues (e.g., tolls) or other monies received by HTA, and 

(ii) the Commonwealth’s retention of certain revenues from gasoline and cigarette excise taxes 

and vehicle license fees historically conditionally appropriated and transferred to HTA (the “HTA 

Allocable Revenues”). The parties to the HTA/CCDA PSA agreed to resolve the various adversary 

proceedings, contested matters, and lawsuits related to, among others, the HTA Bonds described 

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below, on the terms set forth in the HTA/CCDA PSA (Debtor’s Exhibit 14) [Case No. 17-BK3567-LTS, ECF No. 1299-16].

i. The Commonwealth-HTA Revenue Bond Litigations 

103. Ambac, Assured, National and FGIC, as holders and insurers of HTA Bonds, HTA 

Bondholder Peaje Investment, LLC (“Peaje”), and Bank of New York Mellon (“BNYM”), as fiscal 

agent for the HTA Bonds (collectively, the “HTA Defendants”), filed proofs of claim in the 

Commonwealth Title III case, asserting, among other things, (i) HTA Bondholders have a statutory 

lien, security interest and/or property interest in the HTA Allocable Revenues, and (ii) the 

Commonwealth is liable to the HTA Defendants under various statutory, tort, contractual and 

Constitutional theories, for failing to appropriate and transfer the HTA Allocable Revenues to 

HTA. 

104. The Oversight Board, as the Title III representative of the Commonwealth, filed an 

adversary proceeding against the HTA Defendants (Adv. No. 20-00005-LTS in Case No. 17-BK3283-LTS) challenging their proofs of claim against the Commonwealth and seeking to disallow 

the HTA Defendants’ claims in their entirety (the “Commonwealth-HTA Revenue Bond 

Litigation”). 

105. In participating in the various mediation sessions, negotiations, and discussions 

regarding the HTA/CCDA Plan Support Agreement, I am generally familiar with the issues 

litigated in the Commonwealth-HTA Revenue Bond Litigation, and understand they include, but 

are not limited to, whether the HTA Defendants have a valid and enforceable lien, security interest 

or other property interest in the HTA Allocable Revenues retained by the Commonwealth and not 

appropriated and transferred to HTA, whether the Commonwealth’s retention of HTA Allocable 

Revenues is a breach of any obligation owed to the HTA Defendants, and whether any laws 

purporting to appropriate HTA Allocable Revenues to HTA without regard to whether such 

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appropriations are contained in a Commonwealth fiscal plan certified by the Oversight Board and 

a Commonwealth budget certified by the Oversight Board are inconsistent with, and preempted 

by, PROMESA.

106. The Oversight Board, as the Title III representative of the Commonwealth, filed a 

motion for partial summary judgment. At the time the HTA/CCDA Plan Support Agreement was 

executed, the HTA Defendants were conducting supplemental discovery in connection with the 

motion for partial summary judgment and that no oral argument had been scheduled. Pursuant to 

Section 2.1 of the Commonwealth Plan and decretal paragraph 4 of the Commonwealth 

Confirmation Order, which incorporated the terms of the HTA/CCDA Plan Support Agreement,

the Commonwealth-HTA Revenue Bond Litigation was compromised and settled.

ii. The HTA Revenue Bond Litigation

107. The HTA Defendants filed proofs of claim in the HTA Title III Case asserting, 

among other things, (i) the HTA Bonds were secured by statutory or equitable liens against certain 

of HTA’s property including toll and fine revenues collected by HTA, (ii) HTA Bondholders held 

ownership interests in certain of HTA’s property, (iii) HTA Bondholders have first priority, 

perfected security interests against HTA’s property including toll and fine revenues extending 

beyond the security interests (if any) granted in the documents governing the HTA Bonds, and (iv) 

the security interests continued to attach to revenues received by HTA post-petition. 

108. The Oversight Board, as the Title III representative of HTA, filed an adversary 

proceeding against the HTA Defendants (Adv. No. 20-00007-LTS in Case No. 17-BK-3567-LTS) 

seeking to disallow the HTA Defendants’ claims against HTA, except as to any amounts deposited 

by HTA and held in certain specified deposit accounts by the fiscal agent pursuant to 

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Commonwealth law and documents governing the HTA Bonds (the “HTA Revenue Bond 

Litigation”). 

109. In participating in the various mediation sessions, negotiations, and discussions 

regarding the HTA/CCDA Plan Support Agreement, I am generally familiar with the issues 

litigated in the HTA Revenue Bond Litigation, and understand they include, but are not limited to, 

whether the HTA Defendants have a valid and enforceable lien, security interest or other property 

interest in certain of HTA’s property and the HTA Allocable Revenues retained by the 

Commonwealth and not appropriated and transferred to HTA, and whether the Commonwealth’s 

retention of HTA Allocable Revenues violates any obligation owed by HTA to the HTA 

Defendants.

110. At the time the HTA/CCDA Plan Support Agreement was executed, the HTA 

Revenue Bond Litigation was stayed pursuant to a case management order issued by the Title III 

Court. Pursuant to Section 2.1 of the Commonwealth Plan and decretal paragraph 4 of the 

Commonwealth Confirmation Order, which incorporated the terms of the HTA/CCDA Plan 

Support Agreement, the HTA Revenue Bond Litigation was compromised and settled as it relates 

to the Commonwealth.

iii. The HTA Lift Stay Motion

111. The disputes regarding the HTA Allocable Revenues and HTA’s property were not 

limited to the proofs of claim and adversary proceedings described above. In this regard, Assured, 

Ambac, National, and FGIC also filed a motion in the Commonwealth and the HTA Title III cases 

seeking an order granting (i) relief from the automatic stay under PROMESA to allow them to 

enforce the application of the HTA Allocable Revenues or other asserted HTA property to the 

payment of HTA Bonds or, in the alternative, (ii) for adequate protection of their alleged interests 

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in the HTA Allocable Revenues (the “HTA Lift Stay Motion”). The Oversight Board, as Title III 

representative of the Commonwealth and HTA, filed an opposition to the HTA Lift Stay Motion. 

112. At the time the HTA/CCDA Plan Support Agreement was executed, the Title III 

Court issued an order denying the HTA Lift Stay Motion, and the denial was affirmed by the 

United States Court of Appeals for the First Circuit. However, I understand the Courts’ rulings 

did not preclude Assured, Ambac, National, or FGIC from seeking stay relief or adequate 

protection in the future depending on the facts and circumstances. 

iv. The HTA Section 926 Motion

113. Beyond the HTA Lift Stay Motion and the other litigations described above, 

Ambac, Assured, FGIC and National (the “Section 926 Movants”) filed a motion for an order 

appointing them as co-trustees for HTA under section 926 of the Bankruptcy Code for the purpose 

of pursuing certain avoidance claims against the Commonwealth (the “Section 926 Motion”). 

114. I understand the disputes at issue in the Section 926 Motion involve, among other 

things, whether the Oversight Board unjustifiably refused to pursue avoidance claims HTA 

allegedly had against the Commonwealth and suffers from an unresolvable conflict of interest 

because it simultaneously represents both HTA and the Commonwealth in their respective Title 

III proceedings. 

115. At the time the HTA/CCDA Plan Support Agreement was executed, the Title III 

Court issued an order denying the Section 926 Motion, which the Section 926 Movants had 

appealed to the First Circuit Court of Appeals. On April 12, 2021, the DRA Parties filed a motion 

to intervene in the appeal, which the First Circuit granted on June 4, 2021. On July 29, 2021, the 

Section 926 Movants voluntarily dismissed the appeal in light of the agreements reached in the 

HTA/CCDA Plan Support Agreement.

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v. The HTA Lien Challenge Actions

116. On May 20, 2019, the Oversight Board and the Creditors’ Committee filed four 

complaints [Adv. Proc. Nos. 19-00362, 19-00363, 19-00364, and 19-00365] (collectively, the 

“HTA Lien Challenges”) against 148 defendants seeking declarations that holders of the HTA 

Bonds do not possess valid, perfected security interests against HTA, except for toll revenues that 

have been both received by HTA and deposited in certain accounts held at BNYM, in its capacity 

as fiscal agent for holders of HTA Bonds. The HTA Lien Challenges also seek judgments (i) 

declaring HTA’s interest in its property is entitled to priority over any interests HTA bondholders 

allege they possess in any property beyond revenues both received by HTA and deposited with the 

fiscal agent (if even to that extent), (ii) avoiding any security interests HTA bondholders are held 

to possess in such property pursuant to the Bankruptcy Code’s avoidance powers, (iii) disallowing 

all secured claims filed against HTA by bondholders alleging security interests on such property, 

(iv) determining that any right HTA or HTA bondholders have to receive certain taxes or fees 

historically conditionally appropriated to HTA has been preempted by PROMESA, and (v) 

declaring that any security interests in HTA’s property ceased attaching to revenues received 

postpetition by virtue of section 552(a).

117. At the time the HTA/CCDA Plan Support Agreement was executed, the Title III 

Court issued an order staying the HTA Lien Challenges.

2. Summary of Key Terms of the HTA/CCDA PSA

118. On April 12, 2021, the Oversight Board announced it had reached an agreement in 

principle with Assured and National to settle, among other things, claims against the 

Commonwealth and HTA relating to HTA Allocable Revenues, and to restructure, among other 

things, the HTA Bonds. Thereafter, the Oversight Board entered into the HTA/CCDA Plan 

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Support Agreement with certain HTA Bondholders, certain CCDA Bondholders, Assured, and 

National. On May 5, 2021, the Oversight Board entered into the HTA/CCDA Plan Support 

Agreement with certain holders and insurers of HTA Bonds and CCDA Bonds, regarding the 

proposed treatment and settlement of, among other things, certain “clawback claims” against the 

Commonwealth (Debtor’s Exhibit 14) [Case No. 17-BK-3567-LTS, ECF No. 1299-16]. The 

HTA/CCDA Plan Support Agreement, among other things, (i) provides for a global resolution of 

disputes regarding the bondholders’ rights and alleged property interests in certain allocable 

“clawed back” revenues of the Commonwealth and certain of HTA’s alleged property, (ii) 

provides for the issuance of new bonds by HTA and CVIs by the Commonwealth, along with the 

payment of certain amounts in cash by HTA, resolving the bondholders’ claims against the 

Commonwealth and HTA, (iii) provides for the bondholders and insurers to support the 

Commonwealth Plan and the HTA Plan, and (iv) provides an agreement regarding the structure of 

a potential plan of adjustment for HTA which resolves the parties’ disputes regarding the alleged 

security interest against HTA’s toll and fine revenues. On July 15, 2021, Ambac, and FGIC joined 

the HTA/CCDA Plan Support Agreement pursuant to separate Joinder Agreements to the 

HTA/CCDA Plan Support Agreement, subject to a right to terminate the HTA/CCDA Plan Support 

Agreement solely as to themselves, which right expired on July 26, 2021. 

119. Pursuant to the HTA/CCDA Plan Support Agreement (Debtor’s Exhibit 14) [Case 

No. 17-BK-3567-LTS, ECF No. 1299-16], upon confirmation of the Commonwealth Plan, in 

exchange for resolving the claims against the Commonwealth and HTA arising from or relating to 

the HTA Bonds, including the claims at issue in the Commonwealth-HTA and HTA Revenue 

Bond Litigations, and the agreement not to commence or pursue any pending or further litigation 

on account of the HTA Bonds, including in connection with the HTA Lift Stay Motion or the 

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Section 926 Motion, holders of such claims would be entitled to receive a combination of 

securities, cash, and/or new bonds, as described below.

120. Pursuant to the Commonwealth Plan and Commonwealth Confirmation Order, 

upon satisfaction of the HTA Distribution Conditions, (i) holders of Allowed CW/HTA Claims

collectively received 68.6% of the Clawback CVI, a contingent value instrument that is based on 

sharing the potential outperformance of 5.5% of the Commonwealth’s Sales and Use Taxes, 

relative to projections in the 2020 Commonwealth Fiscal Plan, and (ii) holders of claims against 

HTA arising from or relating to HTA 68 Bonds (as set forth in the HTA/CCDA Plan Support 

Agreement) (the “HTA 68 Bond Claims”) received payment from HTA in the aggregate amount 

of $184.8 million in cash (the “HTA 68 Bond Cash”), and holders of claims against HTA arising 

from or relating to HTA 98 Senior Bonds (as set forth in the HTA/CCDA Plan Support Agreement) 

(“HTA 98 Senior Bond Claims” and, together with the HTA 68 Bond Claims, the “HTA Bond 

Claims”) received payment from HTA in the aggregate amount of $79.2 million in cash (the “HTA 

98 Senior Bond Cash” and, together with the HTA 68 Bond Cash, the “HTA Cash”). The principal 

amount of the HTA 68 Bonds and HTA 98 Senior Bonds, and corresponding HTA Bond Claims, 

was reduced by the amount of HTA Cash. Based on updates provided to the Oversight Board by 

its advisors, I understand that the HTA Distribution Conditions were satisfied on June 24, 2022 

and the HTA Cash and Clawback CVIs were distributed pursuant to the terms of the 

Commonwealth Plan and Commonwealth Confirmation Order on or before July 11, 2022.

121. As also provided in the HTA/CCDA Plan Support Agreement, the HTA Plan 

provides that HTA will issue $1.245 billion in new bonds (the “New HTA Bonds”), including 

current interest bonds, capital appreciation bonds, and convertible capital appreciation bonds, to 

holders of HTA Bond Claims. 

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122. To compensate the Initial HTA/CCDA PSA Creditors for fees and expenses 

incurred in connection with the negotiation and execution of the HTA/CCDA Plan Support 

Agreement, each Initial HTA/CCDA PSA Creditor will be entitled to receive an amount equal to 

one percent of its respective HTA Bond Claim (the “HTA Consummation Costs”). In exchange 

for agreeing to support and vote to accept the HTA Plan and to “lock-up” their respective bonds 

in accordance with the terms of the HTA/CCDA PSA, each Initial HTA/CCDA PSA Creditor and 

HTA/CCDA Joinder Creditor holding or insuring HTA Bonds is entitled to receive a restriction 

fee (the “HTA Restriction Fee”). The HTA Consummation Costs and the HTA Restriction Fee 

are available up to an aggregate maximum amount of $125 million, payable by HTA upon the 

effective date of the HTA Plan. 

B. DRA Stipulation

1. Existing Disputes and Litigation Resolved by the DRA Stipulation

123. On November 7, 2018, the United States District Court for the District of Puerto 

Rico approved the GDB Qualifying Modification. To give effect to the GDB Qualifying 

Modification, the Commonwealth created, pursuant to the Government Development Bank for 

Puerto Rico Debt Restructuring Act, Act 109-2017, the DRA—a statutory public trust and public 

governmental instrumentality of the Commonwealth. Pursuant to a Master Transfer Agreement, 

dated as of November 29, 2018 (the “Transfer Agreement”), between DRA and GDB, GDB 

transferred substantially all of its assets to DRA, including, among other things, GDB’s legal 

rights, title, and interest in twenty-three (23) promissory notes issued by HTA in favor of GDB 

(the “HTA Notes”) and $200,000,000 in aggregate original principal amount of HTA Senior 98 

Bonds. 

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124. The DRA Parties commenced actions, filed pleadings, and participated in 

connection with numerous actions related to the Commonwealth’s and HTA’s Title III cases 

(collectively, the “DRA-Related Disputes”), including, among others: (1) DRA Parties’ lift stay 

motions, (2) DRA adversary proceeding, and (3) Clawback Actions. The parties to the DRA 

Stipulation agreed to resolve these various adversary proceedings, contested matters, and lawsuits 

described below, on the terms set forth in the DRA Stipulation (Debtor’s Exhibit 16) [Case No. 

17-BK-3567-LTS, ECF No. 1299-18].

i. DRA Adversary Proceeding

125. The DRA Parties filed an adversary complaint [Adv. Proc. No. 21-00068] (the 

“DRA Adversary Proceeding”) against Assured, Ambac, FGIC, National, Peaje, and BNYM as 

fiscal agent for holders of certain bonds issued by HTA (collectively the “DRA Defendants”). The 

complaint requested entry of various declaratory judgments regarding the validity, extent, seniority 

and priority of the DRA Parties’ and the Defendants’ alleged rights with respect to (1) certain 

revenues collected pursuant to Acts 30-2013 and 31-2013 (“Act 30-31 Revenues”), (2) the 1968 

HTA Bonds and 1998 HTA Bonds, (3) fifteen (15) loan agreements entered into by GDB and HTA 

between March 2008 and January 2014 (as amended, amended and restated, supplemented or 

otherwise modified, the “Loan Agreements”), and (4) the assignment and security agreement 

executed by and between HTA and GDB on August 28, 2013 in connection with the Loan 

Agreements. On July 28, 2021, the Oversight Board filed a motion for leave to intervene as a 

defendant and AAFAF filed a joinder to the motion [Adv. Proc. No. 21-00068, ECF Nos. 26, 27]. 

On August 2, 2021, the DRA Parties filed an opposition to the Oversight Board’s motion for leave 

to intervene [Adv. Proc. No. 21-00068, ECF No. 30]. On August 11, 2021, Magistrate Judge Dein

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issued an order granting (i) the Oversight Board’s motion for leave to intervene as a defendant and 

(ii) AAFAF’s joinder in connection with the same [Adv. Proc. No. 21-00068, ECF No. 34].

126. At the time the DRA Stipulation was executed, the Title III Court had previously

issued an opinion and order granting Ambac, Assured, National, FGIC, BNYM and Peaje’s joint 

motion to dismiss the complaint. I understand that pursuant to the DRA Stipulation, the DRA 

Parties agreed to settle and compromise the DRA Adversary Proceeding, including any right to 

appeal the Title III Court’s decision, pursuant to the terms of the Commonwealth Plan, and the 

adversary proceeding was subsequently dismissed.

ii. The DRA Parties’ Lift-Stay Motions

127. The disputes regarding the HTA Notes were not limited to the DRA Adversary 

Proceeding described above. In this regard, the DRA Parties filed a motion for relief from the 

automatic stay to exercise remedies against DRA’s asserted HTA collateral, including gasoline 

taxes, gas oil and diesel oil taxes, motor vehicle and license fees, toll revenues, petroleum products 

taxes and cigarette taxes. To secure obligations to the DRA pursuant to the GDB DRA bonds, the 

DRA Parties asserted GDB transferred, among other things, certain HTA loans, bond assets, and 

claimed collateral to DRA. The DRA Parties argued that (i) the Commonwealth and HTA’s alleged 

depletion of the “HTA collateral” without providing adequate protection provided cause to lift the 

stay, and (ii) the Commonwealth and HTA lacked any property interest or equity in the “HTA 

collateral,” which they claimed are unnecessary for an effective reorganization. In the alternative, 

the DRA Parties requested the Title III Court require the Commonwealth and HTA to provide 

adequate protection by paying current interest under the HTA loans and bonds. The DRA Parties 

subsequently filed an Amended Lift Stay Motion, which alleged substantially the same claims as 

the DRA Lift Stay Motion.

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128. At the time the DRA Stipulation was executed, the DRA Parties filed a notice 

withdrawing, with prejudice, the DRA Parties’ Lift Stay Motions. Accordingly, the Title III Court 

issued an order granting the DRA Parties’ notice of withdrawal with prejudice. I understand the 

Court’s rulings preclude the DRA Parties from seeking stay relief or adequate protection in the 

future depending on the facts and circumstances. 

iii. The HTA Lift Stay Motion

129. As described above, Assured, Ambac, National, and FGIC filed the HTA Lift Stay 

Motion in the Commonwealth and the HTA Title III cases seeking an order granting (i) relief from 

the automatic stay under PROMESA to allow them to commence an action to compel the 

Commonwealth to use the HTA Allocable Revenues or HTA to apply toll and fine revenues to the 

payment of HTA Bonds or, in the alternative, (ii) for adequate protection of their alleged interests 

in the HTA Allocable Revenues or other asserted HTA property. The DRA Parties filed a notice 

that the DRA was a party in interest and could participate in the HTA Lift Stay Motion, or in the 

alternative, allow a motion to permit their intervention in the HTA Lift Stay Motion. The Oversight 

Board, as Title III representative of the Commonwealth and HTA, filed an opposition to the HTA 

Lift Stay Motion, including a response to the DRA Parties. 

130. At the time the DRA Stipulation was executed, the Title III Court had already issued 

an order denying the HTA Lift Stay Motion, and the denial was affirmed by the United States 

Court of Appeals for the First Circuit. However, I understand the Courts’ rulings do not preclude 

Assured, Ambac, National, or FGIC from seeking stay relief or adequate protection in the future 

depending on the facts and circumstances. Further, on appeal, the DRA Parties sought that their 

claimed interests be reserved. I understand that pursuant to the DRA Stipulation, as incorporated 

into the HTA Plan, the DRA Parties agreed to settle and compromise the HTA Lift Stay Motion, 

including any right to appeal.

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2. Summary of Key Terms of the DRA Stipulation

131. On November 5, 2021, the DRA Parties and the Oversight Board entered into the 

DRA Stipulation, in which the parties agreed to settle and compromise the DRA-Related Disputes 

and for the DRA Parties to support the HTA Plan and related solicitation processes, and vote to 

accept the HTA Plan, among other things, including: (i) the DRA Parties would support the 

Commonwealth Plan and HTA Plan and related solicitation processes; (ii) the DRA Parties would 

vote to accept the HTA Plan; (iii) the DRA Parties would withdraw and/or dismiss with prejudice, 

as applicable, each of the DRA-Related Disputes; and in consideration for the agreements set forth 

in the DRA Stipulation, including the agreement to “lock-up” its HTA Senior 98 Bonds and the 

HTA/GDB Claims, and (iv) DRA would be entitled to receive a $15 million restriction fee in the 

form of an allowed administrative expense claim. 

132. By entering into the DRA Stipulation, the DRA Parties agreed to vote to accept 

both the Commonwealth Plan and further support confirmation of the HTA Plan, which included 

supporting approval of the HTA Disclosure Statement.

133. Pursuant to the DRA Stipulation, in exchange for resolving the claims against the 

Commonwealth and HTA arising from or relating to the claims at issue in the DRA-Related 

Disputes, and the agreement not to commence, prosecute, or pursue any pending or further 

litigation on account of the claims on any basis, including in connection with the DRA Lift Stay 

Motions, the Oversight Board included in both the Commonwealth Confirmation Order and the 

HTA Plan, customary language providing for the exculpation of the DRA Parties, the DRA, and 

their respective professionals and advisors.

134. In exchange for executing the DRA Stipulation, and agreeing to all of its terms and 

conditions, including the agreement to “lock-up” its HTA 98 Senior Bonds and the HTA/GDB 

Claims in accordance with the terms and provisions set forth in the DRA Stipulation, on the HTA 

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Effective Date, or as soon as practicable thereafter in accordance with the terms and provisions set 

forth in the DRA Stipulation, HTA Plan, and HTA Confirmation Order, but in no event later than 

ten (10) Business Days following the HTA Effective Date, the DRA shall be entitled to receive 

the DRA Restriction Fee, payable in cash, in the amount of Fifteen Million Dollars 

($15,000,000.00).

135. Further, on the Effective Date of the HTA Plan, the HTA Senior 98 Bond Claims, 

the HTA Senior 98 Bond Claims (Ambac), the HTA Senior 98 Bond Claims (Assured), the HTA 

98 Senior Bond Claims (National) and the HTA Senior 98 Bond Claims (FGIC) shall be allowed 

in an aggregate amount of approximately $3 billion and the DRA’s ownership of $200 million of 

principal of the HTA 98 Senior Bonds should also be recognized in the aggregate amount.

C. The Consummation Costs and Restriction Fees Contemplated in the Plan 

Settlement Agreements are Reasonable and Fair

136. As Chairman of the Oversight Board, as noted, I often participated in and am 

familiar with the Oversight Board’s discussions and negotiations and agreements reached with 

respect to the HTA/CCDA Plan Support Agreement and the DRA Stipulation. In executing each 

of these PSAs, and agreeing to their terms and conditions, the Oversight Board considered, among 

other things, (i) the extensive, good faith and arm’s-length negotiations (led by the Mediation 

Team) among representatives of the Oversight Board, its consultants, and representatives of certain 

claim holders, (ii) the risks and expenses (and time commitment) relating to the substantial 

litigation remaining in the HTA/CCDA PSA Litigation and the DRA-Related Disputes 

(collectively, the “Plan Litigation”), all of which are resolved by the Plan Settlement Agreements, 

and (iii) the central components of each of the Plan Settlement Agreements. For the reasons 

described below, I believe that payment of the Consummation Costs and Restriction Fees as 

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contemplated in the Plan Support Agreements, and as incorporated into the HTA Plan, is fair and 

reasonable and a necessary component of a largely consensual plan.

137. Each of the Plan Settlement Agreements was reached following months of 

negotiations directed by the Mediation Team and/or other informal discussions that included party 

representatives, legal and financial advisors, and involved vigorous debate and discussion on both 

sides. I believe the negotiations leading to the Plan Settlement Agreements were conducted at 

arms’-length and in good faith.

138. The Plan Litigation resolved by the Plan Settlement Agreements involves 

extraordinarily complex, high-stake disputes and, because these are the first Title III cases litigated 

under PROMESA, novel legal issues. Collectively, billions of dollars were at stake. From the 

Oversight Board’s perspective, the consequence of the DRA, monoline insurers, or HTA 

bondholders prevailing on their property interest contentions would ultimately have inflicted grave 

harm on HTA, because HTA would have lost control of billions of dollars of revenues needed to 

sustain its operations and pursue any restructuring. Instead, the revenues would have been payable 

to the DRA/GDB Bondholders or the HTA bondholders or monoline insurers, including revenues 

received by HTA post-petition. This would have prevented the Oversight Board from developing 

fiscal plans and budgets necessary to carry out its statutory mission and improve the overall 

conditions on the Island. While the Oversight Board believed it should prevail in those litigations, 

even a small risk of a negative and grave outcome was imprudent to undertake once settlement 

was possible on the terms in the Commonwealth Plan and the HTA Plan. 

139. Additionally, the Plan Settlement Agreements resolve countless proofs of claim, 

adversary proceedings, contested matters, and disputes related to the HTA Plan. The Plan 

Litigation has been vigorously litigated, and, if continued to be litigated to conclusion, would take 

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up enormous amounts of time and resources (judicial and otherwise), and no matter the outcome, 

undoubtedly would be appealed by the unsuccessful side, resulting in further delays and protracted 

litigation, all of which would come at a substantial cost to HTA, because of both the significant 

expenses that would be incurred in such litigation and the potential impact any such litigation 

would have on HTA’s ability to exit Title III. The Plan Litigation has been, and would certainly 

continue to be, extremely expensive to litigate. It is my understanding that the likelihood all the 

disputed issues would be resolved in HTA’s favor is not certain. Resolution of the Plan Litigation 

avoids any such uncertainty, and the delay and significant expense it entailed.

140. In addition, while the Oversight Board believes the risk of a materially adverse 

outcome in connection with the various litigations was less than fifty percent (50%) based on 

decisions rendered to date, an adverse determination in any one or more of the actions could have 

been catastrophic for HTA’s restructuring efforts, as explained above.

141. Similarly, if the Plan Litigation described in Sections III.A.1 and III.B.1 relating to 

HTA were resolved adversely to HTA, it could result in significant liability of HTA that may have 

to be satisfied in cash. I understand that if, for example as alleged, the HTA Bondholders held

security interests that would have attached to revenues received by HTA post-petition, any plan of 

adjustment that does not provide for full payment of these claims, which totaled approximately 

$4.3 billion in principal amount alone with respect to the HTA Bonds, would be unconfirmable. 

As with the other disputes described above and resolved by the various agreements reached, 

settlement was by far the wiser path—and on terms HTA can afford, while still being able to 

provide the necessary government services to the residents of Puerto Rico.

142. Beyond avoiding the cost and expense of litigation, the Plan Settlement Agreements 

also prevent adverse results that could, among other things, dilute recoveries of other HTA 

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claimholders and jeopardize consensual restructurings. The Plan Settlement Agreements also free 

up consideration, which saved value can be (and was) used to obtain additional support for 

achieving a nearly completely consensual confirmation of the Commonwealth Plan, and similarly 

now, the HTA Plan.

143. The payments of the Consummation Costs and Restriction Fees are critical 

components of the Plan Settlement Agreements that made development of the HTA Plan possible. 

Specifically, in consideration for their efforts in assisting in the formulation of the HTA Plan, and 

to compensate the HTA/CCDA PSA Creditors for fees and expenses incurred in connection with 

the negotiation and execution of the HTA/CCDA Plan Support Agreement, the Oversight Board 

determined that it is fair and reasonable for the PSA Creditors to be paid the Consummation Costs. 

Similarly, in exchange for executing the HTA/CCDA Plan Support Agreement (Debtor’s Exhibit 

14) [Case No. 17-BK-3567-LTS, ECF No. 1299-16] or the DRA Stipulation (Debtor’s Exhibit 16)

[Case No. 17-BK-3567-LTS, ECF No. 1299-18], as applicable, and agreeing to all of its terms and 

conditions, including agreeing to support the HTA Plan and to “lock up” their respective HTA 

bonds and HTA/GDB Claims, as applicable, the Oversight Board determined that it is fair and 

reasonable to make a HTA Restriction Fee available to each Initial HTA/CCDA PSA Creditor and 

HTA/CCDA Joinder Creditor party to the HTA/CCDA Plan Support Agreement, and the DRA 

Restriction Fee available to each DRA bondholder party to the DRA Stipulation. 

144. In my judgment, the Consummation Costs and Restriction Fees as contemplated in 

the Plan Settlement Agreements, and incorporated in the HTA Plan, are reasonable and fair and 

the product of extensive arms’-length negotiations among sophisticated parties.

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IV. Discharge, Release, Exculpation and Injunction Provisions

145. The HTA Plan includes certain discharge, release, exculpation, and injunction 

provisions, which, based on my review of the HTA Plan and my participation in the negotiation 

of the Plan Settlement Agreements, I believe are essential to HTA’s restructuring and a consensual 

restructuring could not be successfully accomplished without these provisions. 

A. The Releases are Appropriate and Essential to the Reorganization of HTA

146. A critical element of the HTA Plan is the complete resolution of the HTA Title III 

Case. To achieve this, the Debtor and claimholders agreed to a mutual release of all Claims and 

Causes of Action arising, in whole or in part, prior to the Effective Date. 

147. The Debtor’s releases incentivized claimholders to support, and undertake actions 

to support, the HTA Plan and its confirmation, without fear of lawsuits in the future. Based on my 

experience, I believe at least some parties to the Plan Settlement Agreements would not have 

entered into those agreements absent the HTA Plan’s release provisions. Due in part to the 

Debtor’s and Reorganized Debtor’s (and their Related Persons’) releases, the Debtor was able to 

secure the substantial concessions reflected in the settlements and, ultimately, the HTA Plan. 

148. The HTA Plan’s discharge and releases granted by claimholders likewise provide 

the Debtor and Reorganized Debtor with assurance that the restructuring balance struck by the 

HTA Plan will not be upset by further claims against the Reorganized Debtor after the Effective 

Date. By obtaining the discharge and release of the Debtor for claims that were or could have been 

asserted prior to the Effective Date, the Reorganized Debtor is better positioned to be successful 

in fulfilling their obligations under the HTA Plan and, eventually, rejoining the capital markets. 

149. The releases of claims by the Debtor is intended to impact only those parties that 

made a significant contribution to the negotiation and development of the HTA Plan, including the 

Debtor and Reorganized Debtor (and their Related Persons), the Government Parties, the 

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HTA/CCDA PSA Creditors, the Creditors’ Committee, the DRA and the DRA Parties, and the 

Related Persons. To the extent the HTA Plan is inconsistent with this intention, it is my 

understanding that the HTA Plan will be modified to reflect that. The released parties and their 

representatives and advisors incurred cost and expense during the course of their essential 

participation in the negotiations. 

150. Based on my experience, I believe the Debtor’s releases of claims against, among 

others, certain Government Parties, HTA/CCDA PSA Creditors, and official committees are 

necessary and essential to the HTA Plan. They were negotiated with each of the key stakeholders 

in a robust, arms’-length process. That process led to broad support for the restructuring framework 

contemplated by the HTA Plan, including the release provisions. I further believe the releases are 

instrumental in obtaining broad support for the HTA Plan and maximizing the HTA Plan’s chances 

for confirmation. I understand that, absent the discharge and release of prepetition Claims against 

the Debtor under the HTA Plan, the Oversight Board would not be able to certify that expenditures 

do not exceed revenues of HTA. For these reasons, I believe both the releases of claims against 

the Debtor by claimholders and the releases of Debtor claims against the releasees are fair and 

reasonable, and in the best interests of the Debtor to fully and finally resolve the Debtor’s Title III 

Case.

B. The HTA Plan Does Not Provide for Third-Party Releases

151. Based on my understanding of the HTA Plan and the negotiations that led to it, the 

HTA Plan’s releases are limited to those that are necessary to effect the Debtor’s successful 

restructuring. Except as explicitly agreed to by the creditors in their respective Plan Settlement 

Agreements, the HTA Plan is not intended to release any claims of a creditor of the Debtors, in its 

capacity as such, against a party that is not a Debtor. To the extent there is any inconsistency 

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between the HTA Plan and that intention, it is my understanding the HTA Plan will be modified 

to reflect that intention. 

C. The Releases Provide for Appropriate Carve-Outs

152. Sections 41.2(d), (e), and (f) of the HTA Plan also carve out from the Released 

Claims certain claims, causes of action, or other rights or powers that are held by the Securities 

and Exchange Commission, the United States, and parties to certain Underwriter Actions. 

Likewise, as confirmed by the definition of Released Claims (see HTA Plan, section 1.262), claims 

against the Commonwealth, AFICA, CCDA, COFINA, ERS, MBA, MFA, PBA, PFC, PRASA, 

PRIDCO, PRIFA, UPR, and PREPA, which are or may be subject to their own restructuring 

proceedings, and Avoidance Actions generally are not released under the HTA Plan. These carveouts help to ensure that only those releases that are reasonable and necessary to HTA Plan 

confirmation are being provided.

D. The HTA Plan’s Exculpation Provisions are Necessary and Narrowly Tailored 

153. Section 41.7 of the HTA Plan provides for exculpation of the Government Parties, 

HTA/CCDA PSA Creditors, the Creditors’ Committee, the DRA Parties and the monoline bond 

insurers for, among other things, any acts taken consistent with the HTA Plan or in connection 

with the formulation, preparation, dissemination, implementation, acceptance, confirmation or 

approval of the HTA Plan and the settlements contained therein (including, but not limited to, the 

Plan Settlement Agreements). Based on my experience, I believe the expectation of exculpation 

incentivized claimholders to participate fulsomely in the negotiations and mediations, support, and 

undertake actions that support confirmation of the HTA Plan without fear of future baseless 

lawsuits. Accordingly, all of the parties being exculpated in the HTA Plan played a key role in the 

negotiation of the HTA Plan and the settlements that enabled the HTA Plan. I believe the HTA 

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Plan’s exculpation provisions are narrowly tailored to the exculpated parties’ efforts related to the 

HTA Plan. The HTA Plan’s exculpation provisions do not alter the liability of any entity that is 

determined to have acted or failed to act in a manner that constitutes intentional fraud or willful 

misconduct. Failing to approve the exculpation provisions would likely expose the parties to 

litigation after months of good faith negotiations.

E. The HTA Plan’s Injunction Provisions are Necessary and Narrowly Tailored

154. The HTA Plan’s injunction provisions (Sections 41.3, 41.6, and 41.11) are 

necessary to the reorganization and are fair to those parties involved. The injunction ensures that 

the releases and exculpations discussed above are preserved and enforced by prohibiting legal 

action concerning the Released Claims, avoiding the time, burden and expense that could be 

incurred if parties were permitted to pursue Released Claims. The HTA Plan’s injunction 

provisions are narrowly-tailored to serve just that purpose.

V. Preemption Pursuant to the HTA Plan

155. It is my belief the continued application of certain Commonwealth statutes that 

otherwise require or permit spending inconsistent with the certified fiscal plan and budget (and 

with any confirmed Title III plan of adjustment as proposed by the Oversight Board) would 

significantly frustrate the carrying out of PROMESA by hampering the Oversight Board’s ability 

to carry out its mission and threaten the Oversight Board’s achievements.

156. Section 38.3 of the HTA Plan states, among other things, that, as of the Effective 

Date, “. . . to the extent not previously preempted pursuant to an order of the Title III Court, 

provisions of the Commonwealth laws that affect the Debtor or Reorganized HTA and are 

inconsistent with PROMESA shall be preempted for the reasons, and to the extent, set forth in 

Exhibit ‘A’ to the Findings of Fact and Conclusions of Law . . . .” I also reviewed Exhibit F to the 

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HTA Plan, entitled “List of Statutes Preempted by PROMESA,” which contains a list of statutes 

identified as inconsistent with, and preempted by, PROMESA. The statutes identified in Exhibit 

F to Debtor’s Exhibit 58 [Case No. 17-BK-3567-LTS, ECF No. 1354-6] are listed in two (2) 

sections: (i) Section I, “Puerto Rico Highway and Transportation Authority Act” and (ii) Section 

II, “Uniform Rate Revision and Modification Act.” A comprehensive list of statutes, which the 

Oversight Board has identified as inconsistent with, and preempted by, PROMESA together with 

the reasons for, and extent of, preemption is attached as Exhibit A to the proposed Findings of Fact 

and Conclusions of Law, which I understand is being filed contemporaneously with this 

declaration.

157. I understand the statutes listed in Section I of Exhibit F to Debtor’s Exhibit 58 [Case 

No. 17-BK-3567-LTS, ECF No. 1354-6] generally require or permit HTA to, among other things, 

incur obligations, spend funds, and repay in full its debts without regard to the fiscal plan and 

budget certified by the Oversight Board. In my view, if these statutes continue to operate or 

otherwise were required to be complied with post-effectiveness of the HTA Plan, they not only 

would be inconsistent with the Oversight Board’s purpose and responsibilities under PROMESA 

described above, but also would undermine the restructuring contemplated by the HTA Plan, 

which proposes to pay those claimholders less than the full amounts of their respective claims. On

their face, the preempted statutes require or permit transfers or debt payments inconsistent with 

the Oversight Board’s powers under PROMESA to control fiscal plans, budgets, and debt 

restructurings.

158. By way of example, I reviewed Articles V-XXIV of the HTA Plan, which propose 

to pay HTA 98 Senior Bond Claims and other HTA debt less than one hundred percent (100%) of 

the presented amount of their claims. Any Puerto Rico statute or other law requiring HTA to pay 

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those claims in full is inconsistent with Title III of PROMESA as manifested by the restructuring 

contained in the HTA Plan. Moreover, the continued application of such statutes would 

significantly hamper the Oversight Board’s mission to return HTA, together with Puerto Rico, to 

fiscal responsibility and access to capital markets because those laws would effectively nullify the 

HTA Plan’s restructuring of HTA’s debt and significantly weaken the Oversight Board’s ability 

to control HTA’s spending. 

159. Similarly, the statutes listed in Section I to Exhibit F to Debtor’s Exhibit 58 [Case 

No. 17-BK-3567-LTS, ECF No. 1354-6] authorize HTA to issue debt without obtaining Oversight 

Board approval. As noted above, I believe continued operation of these statutes would 

significantly detract from PROMESA’s requirement in section 207 and the Oversight Board’s 

mission by allowing HTA to incur debt without Oversight Board approval, without regard to 

whether such debt would impair or interfere with a confirmed HTA Plan, and potentially in an 

amount greater than is authorized by the certified fiscal plan or budget. 

160. It is my understanding that the statutes listed in Section II of Exhibit F to Debtor’s 

Exhibit 58 [Case No. 17-BK-3567-LTS, ECF No. 1354-6] generally regulate the modification of 

toll rates fixed and charged for basic and essential services rendered by public corporations, outside 

the Oversight Board’s Fiscal Plan, HTA Plan and Plan Supplement. Here, too, I believe these 

statutes are inconsistent with PROMESA’s provisions, purposes and goals and, if they remain 

enforceable, would frustrate the setting of toll rates contemplated by the Oversight Board’s 

proposed HTA Plan, Plan Supplement, or Fiscal Plan. Among other things, Article XXV of the 

HTA Plan and the New HTA Bonds Indenture establish a Toll Rate Covenant to ensure that HTA 

Toll Receipts are sufficient to pay amounts due under the New HTA Bonds and the Subordinated 

Indebtedness. The Toll Rate Covenant provides that HTA covenants that “it will at all times charge 

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and collect or cause to be charged and collected Tolls for the use of the Toll Facilities at rates not 

less than those set forth in the schedule of such Tolls then in effect and as shall be required in order 

that Toll Receipts in each Fiscal Year shall equal at least the aggregate of (i) one hundred ten 

percent (110%) of the aggregate of the Required Deposits for such Fiscal Year and (ii) one hundred 

percent (100%) of Annual Debt Service on Subordinated Indebtedness” and, if such Toll Receipts 

will not be or were not sufficient to satisfy the Toll Rate Covenant, HTA will hire a “Traffic 

Consultant” to undertake a study to recommend of schedule of Tolls to satisfy the Toll Rate 

Covenant and eliminate any deficiency resulting from prior year(s)’ failure to satisfy the Toll Rate 

Covenant. New HTA Bonds Indenture § 7.1(a), (d). Furthermore, the New HTA Bonds Indenture 

provides for reserve funds for both the New HTA Bonds and the Subordinated Indebtedness to 

support the debt payment obligations thereunder. HTA Plan § 1.251. Just like the statutes listed 

in Section I of Exhibit F to the HTA Plan, I believe the continued application of the statutes listed 

in Section II would significantly hamper the Oversight Board’s purpose to provide a method for 

Puerto Rico, including HTA, to achieve fiscal responsibility and access to capital markets, to the 

extent they provide a basis for HTA to set toll rates in contravention to the HTA Plan and HTA 

Fiscal Plan. 

I declare under penalty of perjury under the laws of the United States of America that the 

foregoing is true and correct to the best of my knowledge, information, and belief.

Dated: August 7, 2022 /s/ David A. Skeel Jr.

Shushan, NY David A. Skeel, Jr.

Oversight Board, Chairman

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