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

PUERTO RICO SALES TAX FINANCING 

CORPORATION (“COFINA”),

Debtor.

 PROMESA

 Title III

 No. 17 BK 3284-LTS

JOINT REPORT OF MOVANT AMBAC ASSURANCE CORPORATION AND 

RESPONDENTS FINANCIAL OVERSIGHT AND MANAGEMENT BOARD FOR 

PUERTO RICO AND PUERTO RICO FISCAL AGENCY AND FINANCIAL 

ADVISORY AUTHORITY WITH RESPECT TO MOTION FOR ENTRY OF ORDER 

AUTHORIZING DISCOVERY UNDER BANKRUPTCY RULE 2004

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); 

and (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); and (v) Puerto Rico 

Electric Power Authority (“PREPA”) (Bankruptcy Case No. 17 BK 4780‐LTS) (Last Four Digits of Federal 

Tax ID: 3747) (Title III case numbers are listed as Bankruptcy Case numbers due to software limitations).

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To the Honorable United States Magistrate Judge Judith Gail Dein:

Movant Ambac Assurance Corporation (“Ambac”) and Respondents the Financial 

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

Commonwealth of Puerto Rico (the “Commonwealth”), by and through the Oversight Board as 

the Commonwealth’s representative pursuant to section 315(b) of the Puerto Rico Oversight, 

Management, and Economic Stability Act (“PROMESA”),2 the Puerto Rico Fiscal Agency and 

Financial Advisory Authority (“AAFAF” and together with the Oversight Board and the 

Commonwealth, the “Respondents”),3 respectfully submit this joint report in response to the 

Court’s January 17, 2018 Order [ECF No. 2261].

On November 28, 2017, Ambac filed a Rule 2004 Motion seeking from the Oversight 

Board, AAFAF, the Commonwealth, and COFINA information that Ambac contends is necessary 

for it to fully understand how the collection of the SUT has been affected by Hurricane Maria (the 

“SUT Rule 2004 Motion”) [ECF No. 1873]. The Parties submitted a joint status report on January 

5, 2018, wherein the Parties represented that the Respondents had agreed to produce available data 

from the Department of Treasury, as described more fully below. 

1. On January 4, 2018, Respondents reported that they would produce the following 

information to Movants within the following few weeks: 

• Raw data on SUT collections on a monthly basis in the time after Hurricane 

Maria (i.e. late September through December);

• Raw data on a daily basis in the time after Hurricane Maria;

• Older forecasts and estimates that are based on the previous fiscal year (2016-

2017);

2 PROMESA has been codified in 48 U.S.C. §§ 2101–2241.

3 The Movants and Respondents are collectively referred to as the “Parties.”

 

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• Schedules of SUT collection transactions that were carried out in the time after 

Hurricane Maria, including data on the numbers of fiscal terminals that were 

working;

• Estimates on the impact of the SME Executive Order;

• Publications issued by Treasury to merchants regarding SUT collection in the 

time after Hurricane Maria;

• Daily information from Banco Popular regarding the flow of the SUT, including 

what was transferred to COFINA;

• Schedules regarding SUT collection data from the top 25 retailers (identified 

by SIC code4);

• Narrative descriptions of the data collected and publications issued in the time 

after Hurricane Maria;

• Projections/data that will become part of the Fiscal Plan.

2. On January 18, 2018, counsel for AAFAF informed Ambac that AAFAF believed 

it would be able to produce documents to Ambac by the week of January 29. In response, 

Ambac requested to be kept apprised of the progress of the review and production, and also 

requested information regarding the categories of documents that would be produced. 

3. Counsel for AAFAF responded that they would provide information regarding the 

categories of documents when the information was available.

4. On January 24, 2018, Ambac sent a letter to counsel for AAFAF stating that 

because no documents had yet been produced, it would pursue recourse with this Court if 

production of the agreed-to documents did not begin immediately. See Exhibit A. 

5. On January 26, 2018, counsel for AAFAF stated that the Department of Treasury 

had provided data to counsel for AAFAF regarding (1) aggregate SUT collections after 

Hurricane Maria, on both a monthly and daily basis; and (2) daily information from Banco 

Popular regarding the flow of the SUT, including transfers to COFINA. Counsel for AAFAF 

further stated that it would make a production to Ambac of those materials as soon as 

4 The Standard Industrial Classification (“SIC”) is a system for classifying industries by a four-digit code. 

 

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practicable. Counsel stated that the collection process for all of the additional categories of 

documents that Respondents agreed to produce remains on-going. Counsel has not provided any 

timeframe within which it will provide any of the additional categories of agreed-to documents. 

6. On January 31, 2018, the Parties agreed that document production would be 

subject to the same confidentiality terms set forth in the Stipulation Order for the Production and 

Exchange of Confidential Information entered in the Commonwealth-COFINA dispute [Case 

No. 17-257, ECF No. 56]. Counsel for AAFAF represented that they would begin producing 

documents later that day. 

[Remainder of Page Intentionally Left Blank]

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Dated: January 31, 2018

 San Juan, Puerto Rico

FERRAIUOLI LLC

By: /s/ Roberto Cámara-Fuertes 

Roberto Cámara-Fuertes (USDC-PR No. 219002)

Sonia Colón (USDC-PR No. 213809)

221 Ponce de León Avenue, 5th Floor

San Juan, PR 00917

Telephone: (787) 766-7000

Facsimile: (787) 766-7001

Email: rcamara@ferraiuoli.com

 scolon@ferraiuoli.com

MILBANK, TWEED, HADLEY & Mc

CLOY LLP

By: /s/ Dennis F. Dunne 

Dennis F. Dunne 

Andrew M. Leblanc

Atara Miller

Grant R. Mainland

(admitted pro hac vice)

28 Liberty Street

New York, NY 10005

Telephone: (212) 530-5770

Facsimile: (212) 822-5770

Email: ddunne@milbank.com

 aleblanc@milbank.com

 amiller@milbank.com

 gmainland@milbank.com

Attorneys for Ambac Assurance Corporation

/s/ Timothy W. Mungovan

Martin J. Bienenstock 

Stephen L. Ratner

Timothy W. Mungovan

Paul V. Possinger 

(Admitted Pro Hac Vice)

PROSKAUER ROSE LLP

Eleven Times Square

New York, NY 10036

Tel: (212) 969-3000

Fax: (212) 969-2900

Attorneys for the Financial Oversight and 

Management Board and as representative of the 

Debtors

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/s/ Hermann D. Bauer

Hermann D. Bauer (USDC No. 215205)

O’NEILL & BORGES LLC

250 Muñoz Rivera Ave., Suite 800

San Juan, PR 00918-1813

Tel: (787) 764-8181

Fax: (787) 753-8944

Co-Attorneys for the Financial Oversight and 

Management Board and as representative of the 

Debtors

/s/ John J. Rapisardi

John J. Rapisardi 

Peter Friedman

Daniel Cantor

(Admitted Pro Hac Vice)

O’MELVENY & MYERS LLP

7 Times Square

New York, NY 10036

Tel: (212) 326-2000

Fax: (212) 326-2061

Attorneys for the Puerto Rico Fiscal 

Agency and Financial Advisory Authority

/s/ Andres W. Lopez

Andrés W. López

USDC No. 215311

THE LAW OFFICES OF ANDRÉS W. LÓPEZ, P.S.C.

902 Fernández Juncos Ave.

San Juan, PR 00907

Tel: (787) 294-9508

Fax: (787) 294-9519

Co-Attorney for the Puerto Rico Fiscal Agency 

and Financial Advisory Authority 

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Exhibit A

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