UNITED STATES DISTRICT COURT 

FOR THE DISTRICT OF PUERTO RICO 

PROMESA 

Title III 

No. 17 BK 3283-LTS 

(Jointly Administered) 

ORDER RESOLVING THE MOTION OF THE PBA FUNDS 

FOR THE PAYMENT OF RENT 

Upon the motion (the “Motion”) 2 of the PBA Funds for the entry of an order (the “Order”): 

(a) directing the Debtors to (i) satisfy all outstanding postpetition rental obligations arising under 

the PBA Leases and (ii) timely perform all such obligations until the PBA Leases are assumed or 

rejected; or (b) in the alternative, granting the PBA an allowed claim entitled to administrative 

expense priority pursuant to Bankruptcy Code sections 365(d)(3), 503(b), and 507(a)(2) and 

PROMESA section 301(a); and the Court having jurisdiction to consider the Motion and the relief 

requested therein in accordance with PROMESA section 306(a); and venue being proper in this 

district pursuant to PROMESA section 307(a); and the Court determining that notice was proper 

in this matter; and upon consideration of the arguments and evidence submitted in connection with 

1 The Debtors in these title III cases, along with the last four digits of each Debtor’s federal tax identification number, 

are the (i) Commonwealth of Puerto Rico (No. 17-BK-3283-LTS) (3481); (ii) Employees Retirement System of the 

Government of the Commonwealth of Puerto Rico (No. 17-BK-3566-LTS) (9686); (iii) Puerto Rico Highways and 

Transportation Authority (No. 17-BK-3567-LTS) (3808); (iv) Puerto Rico Sales Tax Financing Corporation (No. 

17-BK-3284-LTS) (8474); and (v) Puerto Rico Electric Power Authority (No. 17-BK-4780-LTS) (3747). 

2 Capitalized terms used but not otherwise defined herein shall have the meanings ascribed to such terms in the Motion.

In re: 

THE FINANCIAL OVERSIGHT AND 

MANAGEMENT BOARD FOR PUERTO RICO, 

as representative of 

THE COMMONWEALTH OF PUERTO RICO, 

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the Motion; and any objections to the relief requested herein having been resolved, 

withdrawn, or overruled on the merits, it is HEREBY ORDERED THAT: 

1. The Motion is resolved as follows. 

2. Unless and to the extent the PBA Leases are subsequently adjudged 

not to be leases for purposes of Bankruptcy Code section 365(d)(3) and subject to 

paragraph 3 below, the PBA shall have allowed administrative priority claims 

against the Debtors with respect to unpaid rent accruing under any leases of 

nonresidential real property from and after each Debtors’ respective petition date, 

pursuant to Bankruptcy Code 365(d)(3), 503(b), and 507(a)(2) (including, for the 

avoidance of doubt, any amounts due from the Commonwealth’s agencies and 

departments) arising under PBA Leases currently due and owing to the PBA, 

which shall continue to accrue, but not require payment absent further court order, 

until each such PBA Lease is either assumed or rejected by the applicable Debtor 

(collectively, the “Administrative Rent Claims”). The Debtors shall provide five 

(5) business days’ advance written notice to the Movants and parties that joined 

issue herein of any compromise or settlement of any Administrative Rent Claim 

they intend to sign. 

3. Any and all Administrative Rent Claims and their allowance or 

disallowance shall remain subject to all rights, claims, defenses, and setoffs available 

to each Debtor, as applicable, and the Debtors and the Official Committee of 

Unsecured Creditors retain all rights to assert objections or defenses to the 

Administrative Rent Claims, provided, however, the Debtors shall not be entitled to 

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assert that any of the Administrative Rent Claims have been waived as not timely 

asserted. For the avoidance of doubt, the issues of whether the PBA Leases are “true 

leases” entitled to treatment under section 365(d)(3) of the Bankruptcy Code, the 

validity or enforceability of the PBA bonds or PBA guarantees, and whether a 

debtor-guarantor who is not the tenant under the subject lease is subject to the 

performance obligations of section 365(d)(3), are expressly preserved. 

4. The Debtors, AAFAF, and the Oversight Board shall as soon as 

practicable provide an accounting of purported rent amounts accrued but unpaid 

under the PBA Leases since the Debtors’ respective petition dates. 

5. Nothing in this Order shall prejudice the rights of the PBA or the PBA 

Funds to assert additional claims in connection with the PBA Leases, including, but 

not limited to, general unsecured claims or administrative expense claims, or to 

pursue any other rights or remedies afforded to them under the PBA Leases, the 1995 

Resolution, or any other applicable contract, law, or regulation. 

6. Nothing herein determines any holder of PBA bonds has standing to 

prosecute the Motion, and this Order does not grant them standing. The parties’ 

respective positions in respect of the standing of the holders of the PBA bonds are 

preserved. 

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7. The Court shall retain jurisdiction to hear and determine all matters 

arising from or related to the implementation or enforcement of this order. 

SO ORDERED. 

Dated: March 15, 2018 

 /s/ Laura Taylor Swain 

 LAURA TAYLOR SWAIN

 United States District Judge 

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