Reply Deadline: February 18, 2018 at 2:00 p.m. (EST) 

UNITED STATES DISTRICT COURT 

FOR THE DISTRICT OF PUERTO RICO 

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In re 

THE FINANCIAL OVERSIGHT AND 

MANAGEMENT BOARD FOR PUERTO RICO, 

 as representative of 

THE COMMONWEALTH OF PUERTO RICO, 

et al.,

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Debtors. 

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PROMESA 

Title III 

Case No. 17-BK-3283 (LTS) 

(Jointly Administered) 

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In re 

THE FINANCIAL OVERSIGHT AND 

MANAGEMENT BOARD FOR PUERTO RICO, 

 as representative of 

PUERTO RICO ELECTRIC POWER 

AUTHORITY (PREPA), 

Debtor. 

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PROMESA 

Title III 

Case No. 17-BK-04780 (LTS) 

Court Filing Relates Only to PREPA

LIMITED REPLY OF SCOTIABANK DE PUERTO RICO, AS ADMINISTRATIVE 

AGENT, AND SOLUS ALTERNATIVE ASSET MANAGEMENT LP IN SUPPORT OF 

URGENT MOTION FOR REVISED $300 MILLION LOAN TO PREPA 

 

1

 The Debtors in these Title III cases, along with each Debtor’s respective Title III case number listed as a 

bankruptcy 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).

Case:17-03283-LTS Doc#:2539 Filed:02/18/18 Entered:02/18/18 13:56:15 Desc: Main

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Scotiabank de Puerto Rico (“Scotiabank”), as administrative agent for lenders 

owed approximately $550 million by the Puerto Rico Electric Power Authority (“PREPA”), and 

Solus Alternative Asset Management LP, on behalf of certain managed funds (collectively, 

“Solus”), as lenders of an additional $146 million to PREPA under a separate credit facility 

(together with Scotiabank, the “Fuel Line Lenders”), respectfully submit this limited reply in 

support of the Oversight Board’s and AAFAF’s Urgent Application and Notice of Revised 

Proposed $300 Million Loan from Commonwealth to PREPA (the “Revised Loan Motion”) 

[Dkt. No. 722].2

1. The Fuel Line Lenders continue to support the Government of Puerto Rico and 

the Oversight Board in their effort to provide emergency financing to PREPA. Accordingly, the 

Fuel Line Lenders support entry of the Revised Proposed Financing Order in the form submitted 

by the Oversight Board on February 17, 2018. See Dkt. No. 729, Ex. A. The Fuel Line Lenders 

submit this limited reply to address Paragraph 9 of the Revised Proposed Financing Order and, in 

particular, the proposed revision to Paragraph 9 put forward by the Ad Hoc Group of PREPA 

Bondholders (the “Ad Hoc Group”). 

2. Paragraph 9 of the Revised Proposed Financing Order, as submitted by the 

Oversight Board, provides: 

Current Expense Classification. “Eligible Uses” of the proceeds of the 

Loans pursuant to this Order and the Credit Documents are limited to 

“Current Expenses” under the Trust Agreement. As such, the Debtor’s 

repayment obligations to the Lender for amounts borrowed under the 

Facility shall be treated as “Current Expenses” under the Trust Agreement. 

 

2

 This limited reply is submitted in accordance with the Court’s Order Granting Urgent Motion of 

Oversight Board and AAFAF to Schedule Resolution of Oversight Board and AAFAF’s Urgent 

Application and Notice of Revised Proposed $300 Million Loan from Commonwealth to PREPA 

[Dkt. No. 728]. Capitalized terms not defined have the same meanings as in the Revised Loan Motion. 

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Id. ¶ 9. This classification is entirely consistent with the governing Trust Agreement. 

3. The Ad Hoc Group has proposed to add the following sentence to Paragraph 9 of 

the Revised Proposed Financing Order: 

Nothing in this Order (a) prejudices the right of any party to argue (on the 

basis of this paragraph 9 or otherwise) that a pre-petition claim is or is not 

a Current Expense or (b) constitutes a determination of such issue. 

Dkt. No. 732, Ex. B at 8. 

4. The Fuel Line Lenders do not object to the additional language proposed by the 

Ad Hoc Group. As explained at the hearing on February 15, 2018, the Fuel Line Lenders believe 

it is evident that the Fuel Line Loans constitute Current Expenses under the Trust Agreement but 

the Fuel Line Lenders also recognize that PREPA’s bondholders may dispute this. Feb. 15, 2018 

Tr. 205-207. Those disputes are not before the Court at this time and should not delay entry of 

the Revised Proposed Financing Order. Accordingly, the additional language proposed by the 

Ad Hoc Group is an appropriate modification which preserves all parties’ rights with respect to 

the priority and classification of pre-petition claims. 

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Dated: February 18, 2018 Respectfully submitted, 

/s/ Antonio A. Arias 

Antonio A. Arias 

USDC-PR No. 204906 

aaa@mcvpr.com 

MCCONNELL VALDÉS LLC 

270 Muñoz Rivera Avenue, Suite 7 

Hato Rey, Puerto Rico 00918 

P.O. Box 364225 

San Juan, Puerto Rico 00936-4225 

Telephone: (787) 250-5604 

Facsimile: (787) 759-9225 

/s/ Richard G. Mason 

Richard G. Mason (admitted pro hac vice) 

Amy R. Wolf (admitted pro hac vice) 

Emil A. Kleinhaus (admitted pro hac vice) 

Angela K. Herring (admitted pro hac vice) 

WACHTELL, LIPTON, ROSEN & KATZ 

51 West 52nd Street 

New York, New York 10019 

Telephone: (212) 403-1000 

Facsimile: (212) 403-2000 

Email: rgmason@wlrk.com 

 arwolf@wlrk.com 

 eakleinhaus@wlrk.com 

 akherring@wlrk.com 

Attorneys for Scotiabank de Puerto Rico, as 

Administrative Agent 

/s/ Jose L. Ramirez-Coll 

Jose L. Ramirez-Coll 

USDC-PR No. 221702 

jramirez@amrclaw.com 

ANTONETTI MONTALVO & 

RAMIREZ-COLL 

P.O. Box 13128 

San Juan, Puerto Rico 00908 

Telephone: (787) 977-0303 

Facsimile: (787) 977-0323 

/s/ Sandy Qusba 

Sandy Qusba (admitted pro hac vice) 

Bryce L. Friedman (admitted pro hac vice) 

Nicholas Baker (admitted pro hac vice) 

SIMPSON THACHER & BARTLETT LLP 

425 Lexington Avenue 

New York, New York 10017 

Telephone: (212) 455-2000 

Facsimile: (212) 455-2502 

Email: squsba@stblaw.com 

 bfriedman@stblaw.com 

 nbaker@stblaw.com 

Attorneys for Solus Alternative Asset 

Management LP 

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