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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.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 HIGHWAYS AND

TRANSPORTATION AUTHORITY (“HTA”),

Debtor.

PROMESA

Title III

No. 17 BK 3567-LTS

CLARIFICATION AND REPLY TO

OPPOSITION TO JOINDER OF FINANCIAL GUARANTY

INSURANCE COMPANY TO MOTION OF NATIONAL

PUBLIC FINANCE GUARANTEE CORPORATION FOR ENTRY

OF AN ORDER UNDER BANKRUPTCY RULE 2004 AUTHORIZING LIMITED

DISCOVERY OF THE GOVERNMENT DEVELOPMENT BANK FOR PUERTO RICO

[Dkt. ## 2247, 2277, 2310, 2317]

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

bankruptcy case number due to software limitations and the last four (4) digits of each Debtor’s federal tax

identification number, as applicable, are (i) the Commonwealth of Puerto Rico (the “Commonwealth”) (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 (“PRHTA”) (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 04780-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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Financial Guaranty Insurance Company (“FGIC”), by and through its attorneys Rexach

& Picó, CSP and Butler Snow LLP, files this clarification and reply (this “Reply”) to the

Oposition [sic] to Joinder of Financial Guaranty Insurance Company (ECF. No. 2277) to

National Public Finance Guarantee Corporation’s Rule 2004 Motion in ECF No. 2247 [Dkt. #

2317] (the “Opposition”).2In support of this Reply, FGIC respectfully states as follows:

1. FGIC files this Reply to clarify that FGIC does not seek additional or different

information than that sought by National in its Motion of National Public Finance Guarantee

Corporation for Entry of an Order Under Bankruptcy Rule 2004 Authorizing Limited Discovery

of the Government Development Bank of Puerto Rico [Dkt. # 2247] (“National’s Motion”) .

FGIC seeks only the information and documents produced to National pursuant to the Order

granting National’s and GDB’s Joint Motion to Hold in Abeyance the Motion of National Public

Finance Guarantee Corporation for Entry of an Order Under Bankruptcy Rule 2004 Authorizing

Limited Discovery of the Government Development Bank for Puerto Rico [Dkt. # 2310] (the

“Order”). To the extent FGIC’s Joinder appears to request information different than that

requested by National, FGIC withdraws the request for additional information.

2. FGIC insures approximately $447 million of PRHTA bonds and in that capacity is

one of the largest creditors of PRHTA. The information requested by National, i.e., “documents

regarding the current and historical status of the PR SIB Trust Fund and the treatment of all

funds in the Trust Fund’s accounts,” clearly relates to the property and liabilities of PRHTA and

as such is within the scope of Bankruptcy Rule 2004. This does not appear to be contested, as

GDB and National have indicated that they are cooperating to develop a procedure for satisfying

2 Capitalized terms used but not otherwise defined herein shall have the meaning ascribed to such terms as in

the Joinder of Financial Guaranty Insurance Company to Motion of National Public Finance Guarantee

Corporation for Entry of an Order Under Bankruptcy Rule 2004 Authorizing Limited Discovery of the Government

Development Bank of Puerto Rico [Dkt. # 2277] (the “Joinder”).

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National’s request. As a significant creditor of PRHTA, FGIC requests that it receive the same

information that is furnished to National, on the same terms and conditions that are agreed to by

National or ordered by the Court. FGIC requests that it be authorized to attend any depositions

taken by National in connection with National’s Motion. Liabilities owed to National by PRHTA

are liabilities of FGIC’s debtor, about which FGIC would separately be entitled to discovery

pursuant to Bankruptcy Rule 2004. FGIC submits that piggybacking on National’s discovery is

the most cost efficient and least intrusive means for FGIC to obtain the information.

3. On January 30, 2018, after GDB had filed the Opposition to the Joinder but before

the Court entered its order requiring this Reply, counsel for FGIC contacted counsel for GDB to

determine whether the clarification contained herein would resolve the Opposition. As of the

date of this Reply, counsel for FGIC has not received any response from Counsel for GDB. Also,

since filing the Joinder, the Court entered the Order holding the National Motion in abeyance and

providing a structure for discovery to proceed. Should the Court grant the Joinder, FGIC could

likewise be bound by the terms of the Order.

4. Accordingly, FGIC respectfully requests that the Court grant the Joinder and

require GDB to provide FGIC with any information produced to National pursuant to the Order

and to participate in any related examinations or other proceedings.

Dated: February 1, 2018

Respectfully submitted,

REXACH & PICÓ, CSP

By: María E. Picó

María E. Picó

USDC-PR 123214

802 Ave. Fernández Juncos

San Juan PR 00907-4315

Telephone: (787) 723-8520

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Facsimile: (787) 724-7844

E-mail: mpico@rexachpico.com

BUTLER SNOW LLP

By: Martin A. Sosland

Martin A. Sosland (pro hac vice)

5430 LBJ Freeway, Suite 1200

Dallas, TX 75240

Telephone: (469) 680-5502

Facsimile: (469) 680-5501

E-mail: martin.sosland@butlersnow.com

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Stanford G. Ladner (pro hac vice)

1700 Broadway, 41st Floor

New York, NY 10019

Telephone: (646) 606-3996

Facsimile: (646) 606-3995

E-mail: stan.ladner@butlersnow.com

Christopher R. Maddux (pro hac vice)

J. Mitchell Carrington (pro hac vice)

1020 Highland Colony Parkway, Suite 1400

Ridgeland, MS 39157

Telephone: (601) 985-2200

Facsimile: (601) 985-4500

E-mail: chris.maddux@butlersnow.com

mitch.carrington@butlersnow.com

Jason W. Callen (pro hac vice)

150 3rd Avenue, South, Suite 1600

Nashville, TN 37201

Telephone: (615) 651-6774

Facsimile: (615) 651-6701

E-mail: jason.callen@butlersnow.com

Attorneys for Financial Guaranty Insurance

Company

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