Hearing Date: February 7, 2018, at 9:30 a.m. (Atlantic Standard Time) 

IN THE UNITED STATES DISTRICT COURT 

FOR THE DISTRICT OF PUERTO RICO

In re: 

THE FINANCIAL OVERSIGHT AND 

MANAGEMENT BOARD FOR PUERTO RICO, 

 as representative of 

THE COMMONWEALTH OF PUERTO RICO, et al., 

 Debtors.1

 PROMESA 

 Title III 

 No. 17 BK 3283-LTS 

 (Jointly Administered) 

In re: 

THE FINANCIAL OVERSIGHT AND 

MANAGEMENT BOARD FOR PUERTO RICO, 

 as representative of 

PUERTO RICO ELECTRIC POWER AUTHORITY 

(“PREPA”), 

 Debtor. 

 PROMESA 

 Title III 

 No. 17 BK 4780-LTS 

 This document relates to 

 PREPA Title III case only 

[Caption continued on next page] 

 

 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); 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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THE AD HOC GROUP OF GENERAL OBLIGATION BONDHOLDERS’ 

(I) OBJECTION TO THE URGENT JOINT MOTION OF THE FINANCIAL 

OVERSIGHT AND MANAGEMENT BOARD FOR PUERTO RICO AND THE PUERTO 

RICO FISCAL AGENCY AND FINANCIAL ADVISORY AUTHORITY FOR ENTRY 

OF INTERIM AND FINAL ORDERS (A) AUTHORIZING POSTPETITION SECURED 

FINANCING, (B) GRANTING PRIMING LIENS AND PROVIDING SUPERPRIORITY 

ADMINISTRATIVE EXPENSE CLAIMS, (C) MODIFYING THE AUTOMATIC STAY, 

(D) SCHEDULING A FINAL HEARING, AND (E) GRANTING RELATED RELIEF, 

AND (II) URGENT CROSS-MOTION, IN THE ALTERNATIVE, TO INTERVENE 

The Ad Hoc Group of General Obligation Bondholders (the “GO Group”)2 hereby 

(I) submits this objection to the Urgent Joint Motion of the Financial Oversight and 

Management Board for Puerto Rico and the Puerto Rico Fiscal Agency and Financial Advisory 

Authority for Entry of Interim and Final Orders (A) Authorizing Postpetition Secured Financing, 

(B) Granting Priming Liens and Providing Superpriority Administrative Expense Claims, 

(C) Modifying the Automatic Stay, (D) Scheduling a Final Hearing, and (E) Granting Related 

Relief (Dkt. 549)3 (the “Loan Motion”) filed by the Financial Oversight and Management Board 

for Puerto Rico (the “Oversight Board”) and the Puerto Rico Fiscal Agency and Financial 

Advisory Authority (“AAFAF”), and (II) in the alternative, solely in the event that Court 

determines that the GO Group is not a party in interest with respect to the Loan Motion, crossmoves, pursuant to Rule 2018(a) of the Federal Rules of Bankruptcy Procedure (the “Bankruptcy 

Rules”), made applicable herein by Section 310 of the Puerto Rico Oversight, Management, and 

Economic Stability Act (“PROMESA”),4 to intervene for the sole purpose of objecting to the 

Loan Motion. In support of this objection and cross-motion, the GO Group respectfully states as 

follows: 

 2

 Members of the GO Group file this objection and cross-motion exclusively on their own 

behalves and do not assume any fiduciary or other duties to any other creditor or person. 

3

 “Dkt.” refers to documents filed on the docket of Case No. 17 BK 4780-LTS. 

4

 Pub. L. No. 114-187, 130 Stat. 549 (2016), codified at 48 U.S.C. §§ 2101-2241. 

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TABLE OF CONTENTS

Page 

TABLE OF AUTHORITIES .......................................................................................................... ii 

INTRODUCTION .......................................................................................................................... 1

BACKGROUND ............................................................................................................................ 3

OBJECTION TO LOAN MOTION ............................................................................................... 6

I. THE COURT SHOULD REJECT THE PREJUDICIAL PROVISIONS .......................... 6

A. The Prejudicial Provisions Lack Any Basis In Law Or Fact .................................. 7

1. The Proposed Loan Is Not Fair To The Commonwealth ............................ 7

2. PREPA Has No Immediate Need For The Proposed Loan ....................... 10

3. There Is No Legal Basis To Extinguish The Claims Of NonPREPA Parties .......................................................................................... 11

B. The Prejudicial Provisions Threaten To Preclude Viable Claims Of 

Commonwealth Stakeholders ............................................................................... 12

II. THE GO GROUP HAS STANDING TO OBJECT TO THE LOAN MOTION ............. 15

URGENT CROSS-MOTION, IN THE ALTERNATIVE, TO INTERVENE ............................. 17

A. Intervention Is Necessary For The GO Group To Protect Its Interests ................. 17

B. Intervention Will Not Result In Undue Delay Or Prejudice ................................. 19

CERTIFICATION PURSUANT TO STANDING ORDER ........................................................ 19

CONCLUSION ............................................................................................................................. 19

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ii 

TABLE OF AUTHORITIES 

 Page(s) 

Cases 

AT&T Corp. v. F.C.C., 

317 F.3d 227 (D.C. Cir. 2003) .................................................................................................16 

Delaware Valley Citizens Council for Clean Air v. Davis, 

932 F.2d 256 (3d Cir. 1991).....................................................................................................16 

In re Amatex Corp., 

755 F.2d 1034 (3d Cir. 1985).............................................................................................15, 16

In re Arch Wireless, Inc., 

534 F.3d 76 (1st Cir. 2008) ......................................................................................................12 

In re Bayless, 

2006 Bankr. LEXIS 3304 (Bankr. E.D. Tenn. Oct. 18, 2006) .................................................18 

In re City of Stockton, Cal., 

486 B.R. 194 (Bankr. E.D. Cal. 2013) .....................................................................................14 

In re Johns-Manville Corp., 

36 B.R. 743 (Bankr. S.D.N.Y. 1984) .......................................................................................15 

In re McGaughey, 

24 F.3d 904 (7th Cir. 1994) .....................................................................................................13 

In re PM Cross, LLC, 

No. BR 13-11075-BAH, 2013 WL 6048810 (Bankr. D.N.H. Nov. 15, 2013) ........................17 

In re Pub. Serv. Co. of New Hampshire, 

88 B.R. 546 (Bankr. D.N.H. 1988) ....................................................................................15, 16 

Le Sannom Bldg. Corp. v. Nathanson, 

No. 92 Civ. 8716, 1993 WL 330442 (S.D.N.Y. Aug. 23, 1993) .............................................13 

National Presto Indus., Inc. v. Dazey Corp., 

107 F.3d 1576 (Fed. Cir. 1997)................................................................................................16 

Summers v. Earth Island Inst., 

555 U.S. 488 (2009) .................................................................................................................16 

Statutes and Rules 

11 U.S.C. § 549 ..............................................................................................................................13 

11 U.S.C. § 549(a) .........................................................................................................................13 

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TABLE OF AUTHORITIES—CONTINUED 

 Page(s) 

iii 

11 U.S.C. § 926(a) .........................................................................................................................13 

11 U.S.C. § 1109(b) ...........................................................................................................15, 17, 19 

11 U.S.C. § 1129(a)(3) ...................................................................................................................14 

11 U.S.C. § 1129(b)(1) ..................................................................................................................14 

PROMESA § 207 .............................................................................................................................9 

PROMESA § 301(a) ................................................................................................................13, 14 

PROMESA § 301(c)(7)..................................................................................................................13 

Act 4 of 2016, sec. 8, § 6(o) .............................................................................................................8 

Fed. R. Bankr. P. 2018(a) ........................................................................................................17, 19 

Other Authorities 

Collier on Bankruptcy ....................................................................................................................18 

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INTRODUCTION 

The GO Group objects to the nature and terms of the debtor-in-possession (“DIP”) 

financing sought by the Oversight Board and AAFAF (the “Proposed Loan”), which 

contemplates the Commonwealth of Puerto Rico (the “Commonwealth”) extending a DIP loan to 

the Puerto Rico Electric Power Authority (“PREPA”). Let us be clear, the GO Group does not

object to PREPA obtaining financing to meet a demonstrated need, from an appropriate source, 

and on commercially reasonable terms. But the Proposed Loan meets none of those criteria. 

Rather, the Proposed Loan reflects a unilateral decision by the Oversight Board to use the 

resources of the Commonwealth—itself a Title III debtor that claims to be unable to pay its own 

creditors—to subsidize a legally separate instrumentality that has its own Title III case, its own 

creditors, and its own assets. Worse still, the Oversight Board’s maneuvering seeks to displace 

the legitimate path for seeking such funding for PREPA, which would involve a reasonable 

market process and adequate disclosures of the debtor’s finances. The Oversight Board, which 

serves as representative of both the would-be borrower and the would-be lender, has simply 

determined for itself that this unprecedented transaction is best for all involved. 

It is not. To the contrary, the Proposed Loan is a massive windfall to PREPA, a severe 

and unnecessary financial blow to the Commonwealth, and a startling arrogation of power by the 

Oversight Board. The Proposed Loan seeks immediate authorization for $550 million, even 

though the movants’ own (unsupported) numbers justify only a small fraction of that amount in 

the near term. The terms of the loan do not resemble a reasonable, arms-length transaction. For 

example: Interest begins at zero and stays substantially below market (for an unheard-of DIP 

maturity of up to 30 years); the proffered security is incomplete and invites further uncertainty 

and litigation; and there is no explanation how any of this will be squared with the stated goal of 

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privatizing PREPA in connection with a restructuring. The economic reality is that the Proposed 

Loan transfers hundreds of millions of the Commonwealth’s dollars to PREPA. And even the 

minimal constraints in the Proposed Loan are illusory. Most notably, while the Proposed Loan 

purports to define certain Eligible and Ineligible Uses of the loan proceeds, it vests in the 

Oversight Board and AAFAF discretion to approve any desired level of disbursements for 

Ineligible Uses. In sum, the Loan Motion seeks approval to borrow $550 million immediately 

(and up to $1.3 billion eventually) from the supposedly cash-strapped Commonwealth to spend 

on whatever the Oversight Board and AAFAF deem fit. 

What is more, the Proposed Order seeks factual findings and legal conclusions intended 

to insulate this transaction from challenge in the Commonwealth’s case. The Proposed Order 

goes far beyond a declaration that the Proposed Loan is good for PREPA. Rather, it includes 

various statements claiming that this transaction is good for the Commonwealth too, and 

asserting that the transaction is supported by reasonably equivalent value, not subject to 

avoidance, and fair to both sides. These sorts of exculpating statements have no place in an 

order that should apply only to the transaction from PREPA’s perspective. If the Oversight 

Board and AAFAF seek a determination that the Proposed Loan is actually a fair deal for the 

Commonwealth, they must subject that to testing in the Commonwealth’s case before the full 

scope of the Commonwealth’s stakeholders. But the movants apparently do not intend to subject 

this transaction to such scrutiny, no doubt because this deal is demonstrably unfair to the 

Commonwealth. 

Because the movants have effectively decided to solve PREPA’s problems with the 

Commonwealth’s money and have sought to insulate their actions from legal challenge, the GO 

Group has no choice but to object directly in PREPA’s case to this transaction. Particularly 

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given the overreach of the Proposed Order, there can be little doubt that the GO Group members 

are parties in interest here. Even if that were not the case, intervention would be warranted to, at 

the very least, prevent this attempt to imbue this transaction with court approval in such a way as 

to prevent scrutiny in the Commonwealth’s case. 

BACKGROUND 

PREPA is the electric utility for the Commonwealth of Puerto Rico. Loan Motion ¶ 12. 

It filed a petition for relief under Title III of PROMESA in July 2017. Id. ¶ 9. Following 

Hurricanes Irma and Maria, some market participants speculated that PREPA might seek to 

borrow additional funds while it remains a Title III debtor. E.g., id. ¶ 32. As a result, certain 

creditors of PREPA offered it financing, but AAFAF rejected their proposal. Id. 

By January 2018, reports surfaced that the Commonwealth might seek to serve as a 

debtor-in-possession lender to PREPA. Remarkably, the Commonwealth had not made any 

attempts to obtain debtor-in-possession financing from third-party lenders. The January reports 

prompted Commonwealth stakeholders to urge that any loan be on terms that were fair and 

reasonable to the Commonwealth. For example, on January 16, the GO Group wrote a letter to 

the Oversight Board and AAFAF explaining that any lending should be done directly by the 

federal government (which was anticipated to be the ultimate source of the funds). Even if the 

Commonwealth were the lender, the letter urged, at a minimum “the Commonwealth must 

receive a secured claim that is senior to all other obligations of” PREPA and should receive “a 

market rate of interest appropriate to the transaction.” Ex. A at 3. Otherwise, “the 

Commonwealth would, in effect, be risking Commonwealth revenues to prop up 

instrumentalities that have their own creditors, solely for the sake of convenience or 

expediency.” Id. 

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The reports’ confirmation that PREPA was, in fact, searching for a lender prompted 

private parties to seek to help. Ten private parties, including the GO Group, have begun 

negotiations with the Debtors’ advisors concerning the provision of significant financing to 

PREPA. See Loan Motion ¶ 33; Ex. A at 5 (GO Group proposing on January 16 “to discuss 

these issues with you and arrive at a solution that reasonably addresses the concerns and legal 

rights of all parties in interest”); Ex. B (GO Group writing to PREPA on January 18 noting GO 

Group’s interest “in offering a ‘debtor in possession’ financing loan . . . to PREPA on agreed 

upon market terms”). 

Meanwhile, on January 24, AAFAF released a draft Amended & Restated Fiscal Plan for 

PREPA. See http://www.aafaf.pr.gov/assets/prepa-revisedfiscalplan-01-24-18.pdf (the “PREPA 

Fiscal Plan”). The PREPA Fiscal Plan confirmed prior statements by officials that PREPA 

would be privatized in connection with a plan of adjustment under Title III. See id. at 8 (stating 

that the Fiscal Plan “assumes as a base case the transfer or concession of certain assets” to 

private institutions). This self-proclaimed “Transformation” of PREPA—which could produce 

billions of dollars in proceeds from asset sales—posed additional issues that would need to be 

resolved in any financing. 

Two days later, the Oversight Board signaled that it wished to short-circuit the nascent 

private-party negotiations. Specifically, the Board filed the Urgent Motion for Extension of 

Deadlines and Leave to File Excess Pages in Connection with Third Amended Notice, Case 

Management and Administrative Procedures (Dkt. 547). That motion stated that PREPA, 

through the Board, planned to seek the Court’s permission to accept financing from the 

Commonwealth. Id. ¶ 3. And it proposed that any objections to the contemplated financing 

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motion be filed by February 1, with the motion to be heard at the omnibus hearing on February 7. 

Id. ¶ 5. The Court granted the deadline-extension motion. Dkt. 548. 

The next day, January 27, the Oversight Board and AAFAF filed the Loan Motion, which 

proposed that the Commonwealth make the Proposed Loan to PREPA. Nominally, the Loan 

Motion allowed negotiations with private parties to continue. Loan Motion ¶ 34. For any 

private party to succeed, however, it would have to offer terms that were “superior” from 

PREPA’s perspective to the terms of the Proposed Loan. Id. The Loan Motion effectively 

defeats negotiations because no private market participant could ever do that. 

The terms of the Proposed Loan are woefully unfair to the lender, the Commonwealth. 

Despite PREPA’s financial condition, which the Loan Motion calls “dire” (id. ¶ 16), the 

Proposed Loan offers terms including: 

• up to $550 million available immediately, with up to $1.3 billion available after a final 

hearing (id. at 1), despite an utter lack of support for such lavish amounts (to the contrary, 

their own—unverified—projections demonstrate that only a fraction of that amount is 

needed over the next 15 weeks); 

• almost no meaningful restrictions on the use of the proceeds; PREPA may exceed 

budgeted expenditure amounts by up to 15% without approval from the Oversight Board 

(id. at 4), and it may even (with the consent of the Board and Commonwealth) use the 

proceeds for Ineligible Uses, including to pay its own creditors (id. at 3); 

• zero interest for six months, with rates slowly rising thereafter to a modest three percent

over three years (id. at 6); 

• a lien limited to PREPA’s “Revenues,” as defined in its Trust Agreement with current 

PREPA bondholders (id. at 3), even though PREPA’s impending privatization could 

imperil those Revenues and with no explanation of how that proposed transaction would 

affect the Proposed Loan; 

• a “Carve Out” from that lien covering uncapped administrative expenses, matching 

requirements of federal funding, and fees owed to the United States Trustee (id.); 

• no obligation to repay until PREPA has amassed a $300 million operating reserve plus 

over $500 million in funds to pay budgeted expenses, including those Ineligible Uses 

included in the budget (id. at 5); and 

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• a term of up to 30 years, an absurdly long maturity for debtor-in-possession financing (id.

at 6). 

These are not market terms, and the Loan Motion nowhere contends that they are. 

Although the Loan Motion discusses only how the Proposed Loan affects PREPA and its 

creditors, ¶¶ 37-63, its proposed order (Dkt. 549-1) (the “Proposed Order”) sweeps much 

broader. More particularly, the Proposed Order contains four provisions that directly prejudice 

the Commonwealth and its creditors: 

• “[T]he terms of the [Proposed Loan] are fair to the [Commonwealth] and [PREPA].” 

Proposed Order ¶ D (emphasis added). 

• “The terms of the [Proposed Loan] are fair and reasonable . . . and are supported by 

reasonably equivalent value and fair consideration.” Id. ¶ E (emphasis added). 

• “[PREPA] has an immediate need to obtain the financing under the [Proposed Loan].” 

Id. ¶ A. 

• “[N]o obligation, payment, transfer, or grant of a lien or security interest under the 

[Proposed Loan] or this [Proposed Order] shall be stayed, restrained, voidable, or 

recoverable under PROMESA, the Bankruptcy Code, or any applicable law or subject to 

any avoidance, reduction, setoff, offset, recharacterization, subordination (whether 

equitable, contractual, or otherwise), counterclaims, cross-claims, defenses, or any other 

challenges under PROMESA, the Bankruptcy Code, or any applicable law or regulation 

by any person or entity.” Id. ¶ 4 (emphasis added). 

We call these four provisions the “Prejudicial Provisions” because they are unnecessary to the 

relief the Loan Motion seeks and serve only to prejudice the Commonwealth and its creditors. 

OBJECTION TO LOAN MOTION 

I. THE COURT SHOULD REJECT THE PREJUDICIAL PROVISIONS 

At present, the GO Group objects to the Loan Motion insofar as granting that motion 

entails inclusion of the Prejudicial Provisions in an order. To the extent that it does, the Court 

should deny the Loan Motion. In addition, any order granting the Loan Motion should contain a 

provision stating that the Court’s approval of the Proposed Loan from PREPA’s perspective will 

not in any way prejudice or affect any rights or remedies that creditors of the Commonwealth 

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may assert in connection with the Commonwealth’s decision to enter into the Proposed Loan or 

the implementation thereof. 

A. The Prejudicial Provisions Lack Any Basis In Law Or Fact 

The Court should reject the Prejudicial Provisions because they are invalid. The Loan 

Motion provides no basis for them. 

1. The Proposed Loan Is Not Fair To The Commonwealth 

Among the Prejudicial Provisions are proposed factual findings that “the terms of the 

[Proposed Loan] are fair to the [Commonwealth],” Proposed Order ¶ D, and that those terms “are 

fair and reasonable . . . and are supported by reasonably equivalent value,” id. ¶ E. These 

proposed findings are baseless. The terms of the Proposed Loan are more akin to a gift from the 

Commonwealth to PREPA than to anything that could be called a fair financing. 

For starters, unlike a traditional debtor-in-possession loan, the Proposed Loan does not 

actually limit the use of its proceeds to expenditures that protect the loan’s collateral. To the 

contrary, although the Proposed Loan defines certain “Eligible Uses” and “Ineligible Uses,” it 

immediately eviscerates that distinction by providing that Ineligible Uses are entirely permissible 

at the discretion of “the Lender [Commonwealth] and the Oversight Board.” Loan Motion at 3. 

The Proposed Loan thus contemplates that PREPA may, at the whim of the Oversight Board and 

the Commonwealth, use the loan’s proceeds to do anything, including to pay PREPA 

bondholders. Id. Paying bondholders does not keep PREPA operating. It does not protect the 

Proposed Loan’s collateral. And it does nothing whatsoever to benefit the Commonwealth. In 

short, the Proposed Loan has no limitation at all on the use of proceeds; rather, the 

Commonwealth and the Oversight Board seek authorization to spend the loan proceeds however 

they see fit, without any oversight or scrutiny by this Court, much less any creditor of PREPA or 

the Commonwealth. 

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Those illusory limitations on the use of proceeds are doubly offensive because the 

Proposed Loan fails to guarantee the Commonwealth a reasonable return or reasonable security. 

Initially, the Proposed Loan offers the Commonwealth no return at all. The interest rate for the 

first six months is zero percent. Loan Motion at 6. Over the course of three years, that rate 

slowly rises, but only to three percent, which is a decidedly below-market rate. Id. The 

Commonwealth could invest its money in virtually anything else and assure higher returns for its 

creditors and its people, or at the very least avoid the enormous risks this financing presents. 

Instead, it is just giving the money to PREPA. 

Nor does the Proposed Loan provide the Commonwealth reasonable security. The 

problems with the security begin with the scope of the lien. The lien encompasses only 

“Revenues,” as defined by PREPA’s existing Trust Agreement with its current bondholders. 

Loan Motion at 3. However broad that might be—and it is clear that PREPA and its creditors do 

not currently agree as to what the Trust Agreement provides—it falls well short of all of 

PREPA’s property that might be pledged. E.g., id. ¶ 12 (noting that PREPA “generates, 

transmits, and distributes substantially all the electric power used in Puerto Rico”).5

 This 

limitation in scope is especially problematic because the Loan Motion does not explain how a 

lien on PREPA’s “Revenues” would survive the contemplated privatization of PREPA. Indeed, 

the Loan Motion (at 7) forecloses any “terms and conditions that provide for restrictions on the 

transformation of the energy sector or on the transfer of the Debtor’s assets,” which is how 

 5

 PREPA’s enabling legislation provides that PREPA generally may secure debt by “pledging 

or placing a lien on all or any of its contracts, revenues, and income only.” Act 4 of 2016, sec. 8, 

§ 6(o). But there is no reason that legislation could not be amended to permit PREPA to grant a 

broader lien on all of its assets in favor of the Commonwealth. Indeed, in February 2016, the 

legislation was amended to allow PREPA to “place liens on real or personal property as 

necessary to comply with federal regulations” that govern financing extended through federal 

programs. Id. A similar amendment could presumably be obtained to address liens in favor of 

the Commonwealth if the Commonwealth were to require more robust protections. 

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PREPA describes its future privatization. See PREPA Fiscal Plan at 8. So the Proposed Loan 

offers uncertain security in the near term, and merely invites guesses as to how that security will 

be treated in the privatization transaction that PREPA intends to pursue. 

The problems with the proposed security do not end with its scope. Despite its 

“[s]uperpriority” status, Loan Motion at 2, the Proposed Loan’s lien would functionally be 

subordinate to numerous expenditures. By its terms, the Proposed Loan would be subject to a 

“Carve Out,” which includes apparently unlimited professional fees, state matching requirements 

for federal funds, and fees owed to the United States Trustee. Id. at 3. The Loan Motion does 

not even attempt to justify the Carve Out’s expanse. What is more, PREPA need not prepay the 

Proposed Loan until it has retained over $800 million. Id. at 5 (providing that, before 

prepayment, PREPA may retain “Revenues” up to an operating reserve of $300 million, a 

number never explained, and “budgeted expenses for Ineligible Uses provided for in the 13-

Week Budget”); id. Ex. E (budgeting over $500 million for the latter item). There could be little 

left for payments on the Proposed Loan, especially because these figures merely represent the 

estimates contained in the current 13-Week Budget and could rise significantly in the future. 

Tellingly, the Oversight Board does not explain how the Proposed Loan is in the interest 

of the Commonwealth, even though its own policy and PROMESA require it to do so. Under 

PROMESA, “no territorial government may, without the prior approval of the Oversight Board, 

issue debt.” PROMESA § 207. Pursuant to that provision, the Oversight Board has established 

a policy requiring that “[e]ach Debt Transaction must be advisable for the entity entering into it 

and for Puerto Rico.” Ex. C at 1. The Oversight Board maintains that it has reached that 

conclusion regarding the Proposed Loan “after conducting a rigorous diligence process.” Loan 

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Motion ¶ 44. Such conclusory say-so should hardly pass muster in the face of loan terms so 

patently unfair to the Commonwealth. 

The terms of the Proposed Loan assure that it would blow a hole through the 

Commonwealth’s resources. And, with expected advances of $550 million, and a balance of up 

to $1.3 billion, the Proposed Loan would leave a very large hole indeed.6

 The Proposed Loan is 

a massive transfer of resources from the Commonwealth to PREPA. 

2. PREPA Has No Immediate Need For The Proposed Loan 

There is another proposed factual finding in the Prejudicial Provisions, namely, that 

“[PREPA] has an immediate need to obtain the financing under the [Proposed Loan].” Proposed 

Order ¶ A. This proposed finding, like the first two, is devoid of support. The Court should not 

accept it. 

To the extent that the Oversight Board and AAFAF attempt to justify this proposed 

finding, they do so (as usual) by invoking generalized statements of emergency (e.g., Loan 

Motion ¶¶ 41, 48, 54, 56)—but there is none. The Loan Motion’s own projections indicate that 

PREPA will run out of cash following the week of February 16. Id. Ex. E. Typically, a debtorin-possession loan would be limited prior to a final hearing to the minimum amount required. 

The Proposed Loan, by contrast, exceeds the projected minimum amount, and even its 

projections do not withstand scrutiny. 

 6

 Although the Oversight Board asserts that the Commonwealth “expects” that the amount 

extended to PREPA from the Commonwealth’s own cash reserves will not exceed $550 million, 

and that the remainder of the contemplated $1.3 billion will be funded from federal loans (Loan 

Motion at 19-20), the higher amount is not in fact linked to the Commonwealth’s receipt of 

federal loan funding. Thus, the Commonwealth could extend up to $1.3 billion from its own 

cash reserves. 

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Schedule E sets forth PREPA’s supposed cash flow deficits over 15 weeks. But the 

document is riddled with flaws, inaccuracies, and unexplained assumptions. To take the most 

prominent examples: 

• The schedule does not begin to justify why $550 million should be borrowed 

immediately. According to the schedule, PREPA will have sufficient cash until the week 

of February 23, when it needs $26.9 million, and a total of $254.6 million though the end 

of March. Yet the Proposed Loan seeks to borrow more than twice that amount from the 

Commonwealth’s coffers, with no stated reason. 

• Even across the entire 15-week period covered by the schedule, the numbers cannot 

possibly justify $550 million. Among the $480.9 million claimed to be needed, $124.5 

million is for concededly Ineligible Uses. This includes $28 million in Estimated Gross 

Overtime, $26.8 million in Contract Labor – Title III, and $69.7 million in net 

Emergency Expenditures. Stripped of those expenditures, the schedule sets forth only 

$356.4 million in needed cash across the 15-week period. 

• The schedule assumes Emergency Expenditures the week of April 6 of $93 million that 

will not be reimbursed by FEMA. There is no explanation as to what this is, much less 

why PREPA would incur such significant unreimbursable liability. 

• The schedule assumes that zero dollars in insurance proceeds will be recovered over the 

period, which is wildly out of whack with the “catastrophic damage to the transmission 

and distribution system” (Loan Motion ¶ 17) and with PREPA’s coverage for up to $550 

million in losses, of which it has received or will receive at least $50 million (Dkts. 491, 

514). This money has apparently vanished. 

In short, the Proposed Loan raids the Commonwealth’s funds far beyond any serious 

demonstrated need, even assuming the basic validity of the unverified numbers in the Schedule. 

3. There Is No Legal Basis To Extinguish The Claims Of Non-PREPA 

Parties 

The Proposed Order includes not only findings of fact but also sweeping legal holdings 

that affect the rights of numerous parties. Prominent among them is the final Prejudicial 

Provision, which would extinguish any claim by any person at any time seeking to avoid or 

otherwise challenge the Proposed Loan. Proposed Order ¶ 4 (“[N]o obligation, payment, 

transfer, or grant of a lien or security interest under the [Proposed Loan] or this [Proposed Order] 

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shall be stayed, restrained, voidable, or recoverable under PROMESA, the Bankruptcy Code, or 

any applicable law or subject to any avoidance, reduction, setoff, offset, recharacterization, 

subordination (whether equitable, contractual, or otherwise), counterclaims, cross-claims, 

defenses, or any other challenges under PROMESA, the Bankruptcy Code, or any applicable law 

or regulation by any person or entity.”). 

The Loan Motion never mentions this provision, much less attempts to justify it—

because it cannot. To extinguish a person’s claims, a debtor must, at a bare minimum, provide 

notice to that person and a meaningful opportunity to be heard. E.g., In re Arch Wireless, Inc., 

534 F.3d 76, 83 (1st Cir. 2008) (“[D]ue process requires . . . notice reasonably calculated, under 

all the circumstances, to apprise interested parties of the pendency of the action and afford them 

an opportunity to present their objections.” (quotation marks omitted)). The claim-extinguishing 

Prejudicial Provision fails even this most basic test. PREPA provided notice only to its creditors 

and parties that have requested notice in its Title III case. Loan Motion ¶ 73. Yet, the parties 

most likely to want to avoid the Proposed Loan are the Commonwealth’s stakeholders. Without 

notice to those stakeholders and a corresponding opportunity for them to be heard, their claims 

cannot be extinguished—but this Prejudicial Provision purports to extinguish their claims 

anyway. Even more remarkable is the Oversight Board’s most recent motion (Dkt. 557) seeking 

to prohibit any party from objecting to the effect of the Proposed Loan on the Commonwealth. 

We are responding directly to that motion under separate cover, but suffice it to say that the 

Oversight Board’s gambit turns due process on its head. 

B. The Prejudicial Provisions Threaten To Preclude Viable Claims Of 

Commonwealth Stakeholders 

Regardless whether the Prejudicial Provisions have merit, the Court should not entertain 

them in PREPA’s Title III case. That is because the Prejudicial Provisions threaten claim or 

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issue preclusion of causes of action held by Commonwealth stakeholders. Consequently, if the 

Oversight Board and AAFAF want this Court to so-order the Prejudicial Provisions, they should 

move in the Commonwealth’s Title III case and subject those assertions to proper scrutiny. 

To illustrate the potential preclusive effect on Commonwealth stakeholders, consider an 

avoidance action pursuant to 11 U.S.C. § 549. That provision, made applicable here by 

PROMESA § 301(a), allows avoidance of postpetition transfers that are not authorized by 

PROMESA or by court order.7 Relying on that provision, Commonwealth creditors could seek 

avoidance of the Proposed Loan to PREPA. (No statute authorizes the Commonwealth to 

provide such a sweetheart loan, and the Court in the Commonwealth’s case would not have 

authorized it, either.) Were the Court to adopt the Prejudicial Provisions, however, 

Commonwealth creditors could find the Oversight Board and AAFAF arguing that this cause of 

action is blocked. The Proposed Order (¶ 4) would purportedly bar any “avoidance” of any 

“transfer” pursuant to the Proposed Loan. Moreover, the Court would have found in the 

Proposed Order (¶ D) that the Proposed Loan is “fair to the [Commonwealth].” This finding, 

arguably, could compel the Court to authorize the Proposed Loan in the Commonwealth’s case, 

thus preventing avoidance under Section 549. 

Another example of the potential prejudice would be a motion for relief from the 

automatic stay. Such relief is warranted where a debtor is attempting to “dissipate [its] assets.” 

In re McGaughey, 24 F.3d 904, 907 (7th Cir. 1994); see also, e.g., Le Sannom Bldg. Corp. v. 

Nathanson, No. 92 Civ. 8716, 1993 WL 330442, at *4 (S.D.N.Y. Aug. 23, 1993) (upholding the 

 7

 PROMESA provides that the Oversight Board controls exercise of this avoidance power. 

See 11 U.S.C. § 549(a) (authorizing “the trustee” to avoid certain transfers); PROMESA 

§ 301(c)(7) (“The term ‘trustee,’ when used in a section of title 11, United States Code, made 

applicable in a case under this title by subsection (a), means the Oversight Board.”). However, 

should the Oversight Board refuse to pursue an avoidance action, the Court may appoint a 

separate trustee to do so. 11 U.S.C. § 926(a) (made applicable here by PROMESA § 301(a)). 

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bankruptcy court’s decision to lift the stay on the grounds that “the Debtor had mismanaged the 

Building to such an extent that the interest of creditors were being jeopardized”). Here, as explained 

above, the Proposed Loan amounts to dissipation of assets. But a Commonwealth creditor seeking 

relief from the stay would have to confront the findings in the Prejudicial Provisions that the 

Proposed Loan is “fair to the [Commonwealth],” Proposed Order ¶ D, and that its terms are “fair 

and reasonable,” id. ¶ E. Such findings could stand in the way of a finding that, through the 

Proposed Loan, the Commonwealth was dissipating its assets. 

Finally, the Prejudicial Provisions could even be invoked in an attempt to thwart 

arguments that Commonwealth creditors may raise in objecting to the Commonwealth’s plan of 

adjustment. The Oversight Board, as the plan’s proponent, must establish that any plan is 

“proposed in good faith and not by any means forbidden by law.” 11 U.S.C. § 1129(a)(3) 

(incorporated by PROMESA § 301(a)). And, if the plan impairs creditors, the Board must also 

prove that the plan is “fair and equitable.” Id. § 1129(b)(1) (incorporated by PROMESA 

§ 301(a)). A post-petition, pre-confirmation giveaway like the Proposed Loan could prevent the 

Board from satisfying those requirements. See In re City of Stockton, Cal., 486 B.R. 194, 200 

(Bankr. E.D. Cal. 2013). But, if the Court in PREPA’s case had concluded that the Proposed 

Loan was “fair to the [Commonwealth],” Proposed Order ¶ D, and that PREPA needed the 

Proposed Loan, id. ¶ A, the Oversight Board would argue that those findings suggest that the 

Proposed Loan was not “overreaching.” See Stockton, 486 B.R. at 199. 

* * * 

 For all of these reasons, the Court should reject the Proposed Order insofar as it includes 

the Prejudicial Provisions. Moreover any order granting approval for PREPA to enter into the 

Proposed Loan should state, for the avoidance of doubt, that the Court’s approval of the 

transaction from PREPA’s perspective will not in any way prejudice or affect any rights or 

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remedies that creditors of the Commonwealth may assert in connection with the 

Commonwealth’s decision to enter into the Proposed Loan or the implementation thereof. Such 

language, which is a logical consequence of the Oversight Board’s decision not to seek 

authorization for the Commonwealth to enter into the Proposed Loan, would serve the salutary 

purpose of avoiding any potential for ambiguity or confusion as to the effect of the Court’s order. 

II. THE GO GROUP HAS STANDING TO OBJECT TO THE LOAN MOTION 

In correspondence among the parties following the filing of the Loan Motion, the 

Oversight Board has suggested that the GO Group lacks standing to object to the Loan Motion 

because the Loan Motion was filed in PREPA’s Title III case, rather than the Commonwealth’s. 

That contention is incorrect and should be rejected. 

A. As an initial matter, the GO Group is a “party in interest” within the meaning of 11 

U.S.C. § 1109(b), and therefore has a statutory right to be heard in PREPA’s Title III case. The 

phrase “party in interest,” while left undefined by the Bankruptcy Code, “is to be construed 

broadly, in order to allow parties affected by a [bankruptcy] case to appear and be heard.” In re 

Pub. Serv. Co. of New Hampshire, 88 B.R. 546, 550 (Bankr. D.N.H. 1988); see also, e.g., In re 

Johns-Manville Corp., 36 B.R. 743, 754 (Bankr. S.D.N.Y. 1984) (“[T]he concept of ‘party in 

interest’ is an elastic and broad one designed to give the Court great latitude to insure fair 

representation of all constituencies impacted in any significant way by a [bankruptcy] case.”). 

The basic test under Section 1109(b) is thus “whether the prospective party in interest has a 

sufficient stake in the outcome of the proceeding so as to require representation.” In re Amatex 

Corp., 755 F.2d 1034, 1042 (3d Cir. 1985). 

The GO Group plainly qualifies to participate in PREPA’s Title III case under that 

“elastic and broad” standard. In re Johns-Manville Corp., 36 B.R. at 754. As we have explained 

above, see pp. 12-14, supra, although the Oversight Board has not sought authorization for the 

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Commonwealth to enter into the Proposed Loan, the relief sought in the Loan Motion could 

prejudice the GO Group’s rights by potentially extinguishing claims and arguments the GO 

Group may wish to pursue in the Commonwealth’s Title III case. At a fundamental level, the 

GO Group’s rights may be “affected” by the disposition of the Loan Motion, In re Pub. Serv. Co. 

of New Hampshire, 88 B.R. at 550, and basic fairness therefore requires that the GO Group be 

afforded representation. See In re Amatex Corp., 755 F.2d at 1042. 

B. The same considerations also demonstrate that the GO Group has constitutional 

standing to object to the Loan Motion. The Proposed Order’s Prejudicial Provisions threaten the 

GO Group with “concrete and particularized” injury, Summers v. Earth Island Inst., 555 U.S. 

488, 493 (2009), because they may extinguish or prejudice claims and arguments that the GO 

Group may wish to pursue in the Commonwealth’s Title III case. In analogous circumstances, 

courts have routinely held that this sort of injury—viz., a possibility that a judgment will have 

preclusive effect in subsequent proceedings—is sufficient to confer standing on a litigant. See, 

e.g., AT&T Corp. v. F.C.C., 317 F.3d 227, 238 (D.C. Cir. 2003) (“preclusive effect” of 

administrative decision gave litigant “a stake in this appeal sufficient to support its standing to 

petition for review”); National Presto Indus., Inc. v. Dazey Corp., 107 F.3d 1576, 1579 (Fed. 

Cir. 1997) (holding that the “threat of an unfavorable determination in future litigation due to the 

res judicata effect of an adverse judicial determination may be . . . an injury” supporting 

standing); Delaware Valley Citizens Council for Clean Air v. Davis, 932 F.2d 256, 263 n.6 (3d 

Cir. 1991) (EPA had standing to appeal judgment where adverse party “could use the judgment 

to collaterally estop the EPA” in a separate proceeding). These principles apply here. The GO 

Group therefore has standing to object to the Loan Motion. 

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URGENT CROSS-MOTION, IN THE ALTERNATIVE, TO INTERVENE 

For the reasons set forth above, the GO Group has a statutory right to participate in the 

PREPA Title III case pursuant to 11 U.S.C. § 1109(b) as a “party in interest.” See pp. 15-16, 

supra. If the Court rejects that submission, however, the GO Group respectfully requests that it 

be granted intervention pursuant to Bankruptcy Rule 2018(a) for the limited purpose of filing its 

objection to the Loan Motion and participating in all hearings on the Loan Motion. 

Rule 2018(a) provides that, “after hearing on such notice as the court directs and for 

cause shown, the court may permit any interested entity to intervene generally or with respect to 

any specified matter.” Fed. R. Bankr. P. 2018(a). Under Rule 2018(a), permissive intervention 

is “warranted upon a demonstration that the intervenor’s participation is necessary to protect his 

or her interest in the matter and that other parties to the proceeding do not adequately represent 

the intervenor’s interest.” In re PM Cross, LLC, No. BR 13-11075-BAH, 2013 WL 6048810, at 

*3 (Bankr. D.N.H. Nov. 15, 2013). In considering whether to grant intervention, a court may 

also consider “whether intervention would result in undue delay or prejudice to the original 

parties.” Id. Here, each of these factors counsel in favor of intervention. 

A. Intervention Is Necessary For The GO Group To Protect Its Interests 

1. For essentially the same reasons set forth above, see pp. 12-16, supra, the GO Group’s 

intervention is necessary to protect its interests. The Proposed Order’s Prejudicial Provisions 

threaten to thwart arguments and claims that the GO Group may seek to pursue in the 

Commonwealth’s Title III case. That is a direct threat to the GO Group’s legal interests that 

justifies the GO Group’s participation here. As a matter of basic fairness, there is no justification 

for adjudicating the legal interests of the GO Group without allowing the GO Group to be heard. 

In other cases, courts have granted intervention based on threats to a litigant’s interests 

that were far less direct and concrete than those at stake here. For example, intervention may “be 

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permitted to an entity based on that entity’s concern with precedential ramifications of an aspect 

of a case.” Collier on Bankruptcy ¶ 2018.01[3] (emphasis added) (citing In re Bayless, 2006 

Bankr. LEXIS 3304 (Bankr. E.D. Tenn. Oct. 18, 2006)). The GO Group, by contrast, objects to 

provisions of the Proposed Order that would bless the Proposed Loan and could potentially be 

invoked to immunize it from certain legal challenges by Commonwealth creditors in the future. 

The need for intervention is all the more clear in light of the direct nature of the harm threatened 

here. 

2. Intervention is also appropriate because the existing parties to PREPA’s Title III case 

do not adequately represent the GO Group’s interests. To state the obvious, the Oversight Board 

has proposed the Loan Motion. It therefore cannot be expected to object to it on the ground that 

the Proposed Loan’s terms are insufficiently protective of the interests of the Commonwealth 

and its creditors. Moreover, the Oversight Board is the representative of both the 

Commonwealth and PREPA. Because the Proposed Loan’s terms that prejudice the 

Commonwealth’s interests inure to PREPA’s benefit, the Oversight Board faces a palpable 

conflict of interest and is not an adequate representative of the interests of Commonwealth 

creditors in this context. See pp. 7-10, supra. 

While PREPA’s creditors may well object to the Loan Motion, their incentive is to claim 

only that the Proposed Loan’s terms are too favorable to the Commonwealth. Like PREPA 

itself, PREPA’s creditors are beneficiaries of the Commonwealth’s largesse. They therefore lack 

any incentive to argue that the Proposed Loan’s non-market terms are unfair to the 

Commonwealth and fail to responsibly protect its interests. Under these circumstances, 

intervention by the GO Group is necessary to ensure that the GO Group’s legal interests receive 

adequate representation. 

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B. Intervention Will Not Result In Undue Delay Or Prejudice 

The GO Group’s intervention would not present any risk of undue delay or prejudice to 

the existing parties in the PREPA Title III case. The GO Group has moved to intervene 

promptly following the Oversight Board’s filing of the Loan Motion, and the GO Group’s 

objection is being filed on the schedule established by the Court for resolving the Loan Motion. 

As a consequence, no extension or other accommodation is required to permit the GO Group’s 

participation with respect to this issue. There is accordingly no sound basis to deny the GO 

Group an opportunity to be heard on this dispute. 

CERTIFICATION PURSUANT TO STANDING ORDER 

The GO Group certifies that it has attempted in good faith to resolve with the Oversight 

Board the issues raised in the Urgent Cross-Motion, in the Alternative, to Intervene. The 

Oversight Board opposes this cross-motion. 

CONCLUSION 

The Court should deny the Loan Motion to the extent that any order granting the Loan 

Motion contains the Prejudicial Provisions. Should the Court determine that the GO Group is 

not a party in interest with standing pursuant to 11 U.S.C. § 1109(b), the Court should grant the 

GO Group leave to intervene, pursuant to Bankruptcy Rule 2018(a), for the purpose of objecting 

to the Loan Motion. 

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Dated: February 1, 2018 

/s/ Ramón Rivera Morales 

J. Ramón Rivera Morales 

USDC-PR Bar No. 200701 

Andrés F. Picó Ramírez 

USDC-PR Bar No. 302114 

JIMÉNEZ, GRAFFAM & LAUSELL

P.O. Box 366104 

San Juan, PR 00936 

Telephone: (787) 767-1030 

Facsimile: (787) 751-4068 

Email: rrivera@jgl.com 

Respectfully submitted, 

/s/ Mark T. Stancil 

Lawrence S. Robbins (admitted pro hac vice) 

Gary A. Orseck (admitted pro hac vice) 

Kathryn S. Zecca (admitted pro hac vice) 

Mark T. Stancil (admitted pro hac vice) 

Ariel N. Lavinbuk (admitted pro hac vice) 

Donald Burke (admitted pro hac vice) 

ROBBINS, RUSSELL, ENGLERT, ORSECK,

UNTEREINER & SAUBER LLP 

1801 K Street, N.W., Suite 411-L 

Washington, DC 20006 

Telephone: (202) 775-4500 

Facsimile: (202) 775-4510 

Email: mstancil@robbinsrussell.com 

/s/ Andrew N. Rosenberg 

Andrew N. Rosenberg (admitted pro hac vice) 

Richard A. Rosen (admitted pro hac vice) 

Walter Rieman (admitted pro hac vice) 

Kyle J. Kimpler (admitted pro hac vice) 

Karen R. Zeituni (admitted pro hac vice) 

PAUL, WEISS, RIFKIND, WHARTON 

& GARRISON LLP 

1285 Avenue of the Americas 

New York, NY 10019 

Telephone: (212) 373-3000 

Facsimile: (212) 757-3990 

Email: arosenberg@paulweiss.com 

Counsel to the Ad Hoc Group of General Obligation Bondholders 

 

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CERTIFICATE OF SERVICE 

I hereby certify that, on this same date, I electronically filed the foregoing with the Clerk 

of the Court using the CM/ECF system, which will send notifications of such filing to all 

CM/ECF participants in this case. 

/s/ Mark T. Stancil 

Mark T. Stancil 

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IN THE UNITED STATES DISTRICT COURT 

FOR THE DISTRICT OF PUERTO RICO

In re: 

THE FINANCIAL OVERSIGHT AND 

MANAGEMENT BOARD FOR PUERTO RICO, 

 as representative of 

THE COMMONWEALTH OF PUERTO RICO, et al., 

 Debtors.8

 PROMESA 

 Title III 

 No. 17 BK 3283-LTS 

 (Jointly Administered) 

In re: 

THE FINANCIAL OVERSIGHT AND 

MANAGEMENT BOARD FOR PUERTO RICO, 

 as representative of 

PUERTO RICO ELECTRIC POWER AUTHORITY 

(“PREPA”), 

 Debtor. 

 PROMESA 

 Title III 

 No. 17 BK 4780-LTS 

 This document relates to 

 PREPA Title III case only 

[PROPOSED] ORDER GRANTING THE 

AD HOC GROUP OF GENERAL OBLIGATION BONDHOLDERS’ 

URGENT CROSS-MOTION, IN THE ALTERNATIVE, TO INTERVENE 

Upon consideration of the Ad Hoc Group of General Obligation Bondholders’ Urgent 

Cross-Motion, in the Alternative, To Intervene (the “Intervention Motion”), the Court hereby 

 8

 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); 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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2 

FINDS AND DETERMINES that (i) the Court has jurisdiction to consider the Intervention 

Motion and the relief requested therein pursuant to PROMESA section 306(a);9 (ii) venue is 

proper before this Court pursuant to PROMESA section 307(a); (iii) pursuant to Federal Rule of 

Bankruptcy Procedure 2018(a), made applicable by PROMESA section 310, cause exists to 

permit the Ad Hoc Group of General Obligation Bondholders to intervene; and (iv) proper notice 

of the Intervention Motion has been provided under the circumstances and no other or further 

notice need be provided. Accordingly, 

IT IS HEREBY ORDERED: 

1. The Intervention Motion is GRANTED as set forth herein. 

2. The Ad Hoc Group of General Obligation Bondholders may intervene as a party 

in Case Number 17 BK 4780-LTS with respect to proceedings relating to the Urgent Joint 

Motion of the Financial Oversight and Management Board for Puerto Rico and the Puerto Rico 

Fiscal Agency and Financial Advisory Authority for Entry of Interim and Final Orders 

(A) Authorizing Postpetition Secured Financing, (B) Granting Priming Liens and Providing 

Superpriority Administrative Expense Claims, (C) Modifying the Automatic Stay, (D) Scheduling 

a Final Hearing, and (E) Granting Related Relief (Dkt. 549). 

Dated: February __, 2018 

 ________________________________ 

 LAURA TAYLOR SWAIN 

 United States District Judge 

 9

 The Puerto Rico Oversight, Management, and Economic Stability Act, Pub. L. No. 

114-187, 130 Stat. 549 (2016) (codified at 48 U.S.C. §§ 2101-2241). 

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