180606 SECOND AMENDED INTERIM COMPENSATION PROPOSED ORDER VERSION JUNE 6, 2018 1

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)

SECOND AMENDED ORDER SETTING PROCEDURES FOR INTERIM

COMPENSATION AND REIMBURSEMENT OF EXPENSES OF PROFESSIONALS

Upon the Joint Motion for Entry of an Order Further Amending the Interim Compensation 

Order (the “Motion”);

2 and the Court having found it has subject matter jurisdiction over this 

matter pursuant to PROMESA section 306(a); and it appearing that venue is proper pursuant to

PROMESA section 307(a); and the Court having found that the relief requested in the Motion is in

the best interests of the Debtors, their creditors, and other parties in interest; and the Court having

found that the Debtors provided adequate and appropriate notice of the Motion under the

circumstances and that no other or further notice is required; and the Court having reviewed the

Motion and having heard statements in support of the Motion at a hearing held before the Court

(the “Hearing”); and the Court having determined that the legal and factual bases set forth in the

Motion and at the Hearing establish just cause for the relief granted herein; and any objections to

 

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).

2 Capitalized terms used but not otherwise defined herein have the meanings given to them in the Motion and the 

Order Further Amending Case Management Procedures [Dkt. No. 2839] (the “Case Management Procedures”).

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the relief requested herein having been withdrawn or overruled on the merits; and after due

deliberation and sufficient cause appearing therefor, it is HEREBY ORDERED THAT:

1. The Motion is granted as set forth herein.

2. All Professionals in the Title III Cases may be paid interim payment of compensation

and reimbursement of expenses in accordance with the following procedures (the “Interim

Compensation Procedures”):

a. On or before the 15th day of each calendar month, or as soon as 

practicable thereafter, each Professional may serve a statement (a “Monthly

Fee Statement”) of compensation for services rendered and reimbursement

of expenses incurred during any preceding month or months, by overnight mail

or e-mail (in searchable pdf format) where applicable, on each of the following 

entities (collectively, the “Notice Parties”):

i. attorneys for the Oversight Board, Proskauer Rose LLP, Eleven

Times Square, New York, NY 10036, Attn: Martin J. Bienenstock,

Esq. (mbienenstock@proskauer.com) and Ehud Barak, Esq.

(ebarak@proskauer.com), and Proskauer Rose LLP, 70 West

Madison Street, Chicago, IL 60602, Attn: Paul V. Possinger, Esq.

(ppossinger@proskauer.com);

ii. attorneys for the Oversight Board, O’Neill & Borges LLC, 250

Muñoz Rivera Ave., Suite 800, San Juan, PR 00918, Attn: Hermann

D. Bauer, Esq. (hermann.bauer@oneillborges.com);

iii. attorneys for the Puerto Rico Fiscal Agency and Financial 

Advisory Authority, O’Melveny & Myers LLP, Times Square 

Tower, 7 Times Square, New York, NY 10036, Attn: John J.

Rapisardi, Esq. (jrapisardi@omm.com), Suzzanne Uhland, Esq.

(suhland@omm.com), and Diana M. Perez, Esq.

(dperez@omm.com);

iv. attorneys for the Puerto Rico Fiscal Agency and Financial 

Advisory Authority, Marini Pietrantoni Muñiz LLC, MCS Plaza, 

Suite 500, 255 Ponce de León Ave, San Juan, PR 00917, Attn: Luis 

C. Marini-Biaggi, Esq. (lmarini@mpmlawpr.com) and Carolina 

Velaz-Rivero Esq. (cvelaz@mpmlawpr.com);

v. the Office of the United States Trustee for the District of Puerto

Rico, Edificio Ochoa, 500 Tanca Street, Suite 301, San Juan, PR

00901 (re: In re: Commonwealth of Puerto Rico);

vi. attorneys for the Official Committee of Unsecured Creditors, Paul 

Hastings LLP, 200 Park Ave., New York, NY 10166, Attn: Luc. A

Despins, Esq. (lucdespins@paulhastings.com);

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vii. attorneys for the Official Committee of Unsecured Creditors, 

Casillas, Santiago & Torres LLC, El Caribe Office Building, 53

Palmeras Street, Ste. 1601, San Juan, PR 00901, Attn: Juan J.

Casillas Ayala, Esq. (jcasillas@cstlawpr.com) and Alberto J.E. 

Añeses Negrón, Esq. (aaneses@cstlawpr.com);

viii. attorneys for the Official Committee of Retired Employees, Jenner

& Block LLP, 919 Third Ave., New York, NY 10022, Attn: Robert 

Gordon, Esq. (rgordon@jenner.com) and Richard Levin, Esq.

(rlevin@jenner.com), and Jenner & Block LLP, 353 N. Clark

Street, Chicago, IL 60654, Attn: Catherine Steege, Esq.

(csteege@jenner.com) and Melissa Root, Esq.

(mroot@jenner.com);

ix. attorneys for the Official Committee of Retired Employees, 

Bennazar, García & Milián, C.S.P., Edificio Union Plaza, PH-A,

416 Ave. Ponce de León, Hato Rey, PR 00918, Attn: A.J. 

Bennazar-Zequeira, Esq. (ajb@bennazar.org);

x. the Puerto Rico Department of Treasury, PO Box 9024140, San 

Juan, PR 00902-4140, Attn: Reylam Guerra Goderich, Deputy 

Assistant of Central Accounting

(Reylam.Guerra@hacienda.pr.gov); Omar E. Rodríguez Pérez, 

CPA, Assistant Secretary of Central Accounting 

(Rodriguez.Omar@hacienda.pr.gov); Angel L. Pantoja Rodríguez, 

Deputy Assistant Secretary of Internal Revenue and Tax Policy 

(angel.pantoja@hacienda.pr.gov); Francisco Parés Alicea, 

Assistant Secretary of Internal Revenue and Tax Policy 

(francisco.pares@hacienda.pr.gov); and Francisco Peña 

Montañez, CPA, Assistant Secretary of the Treasury 

(Francisco.Pena@hacienda.pr.gov);

xi. counsel to any other statutory committee appointed; 

xii. attorneys for the Fee Examiner, EDGE Legal Strategies, PSC, 252 

Ponce de León Avenue, Citibank Tower, 12th Floor, San Juan, PR 

00918, Attn: Eyck O. Lugo (elugo@edgelegalpr.com); and

xiii. attorneys for the Fee Examiner, Godfrey & Kahn, S.C., One East 

Main Street, Suite 500, Madison, WI 53703, Attn: Katherine 

Stadler (KStadler@gklaw.com).

b. Any Professional that fails to serve a Monthly Fee Statement for a particular

month or months may subsequently serve a consolidated Monthly Fee

Statement for such month or months. All Monthly Fee Statements shall 

comply with PROMESA and applicable provisions of the Bankruptcy Code,

the Federal Rules of Bankruptcy Procedure (the “Bankruptcy Rules”), and

the Local Bankruptcy Rules for the United States Bankruptcy Court for the

District of Puerto Rico (the “Local Rules”).

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c. In accordance with the procedures described in subparagraph (d) below, each 

Notice Party may file and serve upon the Professional that submitted the 

Monthly Fee Statement and the other Notice Parties, so as to be received on 

or before 4:00 p.m. (Atlantic Standard Time) on the 10th day (or the next 

business day if such day is not a business day) following service of the 

Monthly Fee Statement (the “Objection Deadline”) any objection or 

reservation of rights to the requested fees and expenses. Upon expiration of 

the Objection Deadline, the Professionals that submitted a Monthly Fee 

Statement shall provide a statement (the “Monthly Fee Objection 

Statement”) to the applicable Debtor(s) and the Puerto Rico Fiscal Agency 

and Financial Advisory Authority, providing the calculation of the fees and 

reimbursement requested, any amounts that were objected to, and the amount 

that should be paid after the holdback described further below. Upon receipt 

of the Monthly Fee Objection Statement, the Debtors in whose cases such 

Professionals are retained and/or employed shall promptly pay, and in no event 

pay later than fourteen (14) calendar days after receiving the Monthly Fee 

Objection Statement, the Professional an amount equal to the lesser of (i) 90% 

of the fees and 100% of the expenses requested in the applicable Monthly Fee 

Statement (the “Maximum Monthly Payment”) or (ii) the Maximum 

Monthly Payment less 90% of the fee portion and 100% of the expense portion 

thereof subject to an objection (the “Incremental Amount”) pursuant to 

subparagraph (d) below; provided that, in the case of Paul Hastings LLP, as 

counsel for the Official Committee of Unsecured Creditors, and Zolfo Cooper, 

LLC, as financial advisor to the Official Committee of Unsecured Creditors, 

the applicable Debtors shall promptly pay, and in no event pay later than 

fourteen (14) calendar days after receiving the Monthly Fee Objection 

Statement, 80% of the fees and 100% of the expenses requested in the 

applicable Monthly Fee Statement, but such 80% of fees or 100% of expenses 

shall not be paid with respect to such fees or expenses that are subject to an 

objection pursuant to subparagraph (d) below. The Fee Examiner (as defined 

below) may object to the Interim Fee Applications (as defined below) if not 

consensually resolved.

d. If any Notice Party wishes to object to a Professional’s Monthly Fee

Statement, it must (i) file a written objection (an “Objection”) with the Court

on or before the Objection Deadline and (ii) serve the Objection on the

Professional that submitted the Monthly Fee Statement and each of the other

Notice Parties, so it is received by each of these parties on or before the

Objection Deadline. Thereafter, the objecting party and the affected

Professional may attempt to resolve the Objection on a consensual basis. 

If the parties are unable to reach a resolution of the Objection, the affected

Professional may either (i) file a request with the Court for payment of the fees

and expenses subject to the Objection or (ii) forego payment of the 

Incremental Amount until the next interim or final fee application hearing, at

which time the Court may consider and dispose of the Objection if

requested by the parties. The failure of a Notice Party to file an Objection to 

a Professional’s Monthly Fee Statement shall not preclude such party from 

filing an Objection to such Professional’s Interim Fee Application pursuant to 

subparagraph (g) below. 

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e. Each Professional’s initial Monthly Fee Statement shall cover the period from

the Petition Date of the Commonwealth’s Title III Case through the end of

the full month preceding the filing date of the Monthly Fee Statement. 

Thereafter, Professionals may serve Monthly Fee Statements in the manner 

described above.

f. Consistent with PROMESA section 317, at four-month intervals

(an “Interim Fee Period”), each of the Professionals may file with the Court

and serve on the Notice Parties an application (an “Interim Fee Application”)

for interim Court approval and allowance of the payment of compensation 

and reimbursement of expenses sought by such Professional for the Interim 

Fee Period, including any holdback pursuant to PROMESA section 317. 

Each Interim Fee Application must include a brief description identifying the 

following:

i. the Monthly Fee Statements subject to the request;

ii. the amount of fees and expenses requested;

iii. the amount of fees and expenses paid to date or subject to an 

Objection;

iv. the deadline for parties to file Objections to the Interim Fee 

Application; and

v. any other information requested by the Court or required by the

Local Rules or the Fee Examiner in accordance with the order 

appointing the Fee Examiner [Dkt. No. 1416].

g. Objections, if any, to the Interim Fee Applications by any party other than 

the Fee Examiner shall be filed and served upon the Professional that filed

the Interim Fee Application and the other Notice Parties so as to be received 

on or before the 20th day (or the next business day if such day is not a business 

day) following service of the applicable Interim Fee Application.

h. Requests by the Fee Examiner to adjourn the hearing on any Interim Fee 

Application (such Interim Fee Applications identified in the request, 

“Adjourned Interim Fee Applications,” and the rescheduled hearing, the 

“Adjourned Fee Hearing”), if any, shall be filed and served upon the 

Professional that filed the Adjourned Interim Fee Application and the other 

Notice Parties so as to be received at least seven (7) calendar days prior to a 

scheduled hearing on interim fee applications. Objections by the Fee 

Examiner, if any, to any Adjourned Interim Fee Application shall be filed and 

served upon the Professional that filed the Adjourned Interim Fee Application 

and the other Notice Parties on or before fifteen (15) calendar days before the 

applicable Adjourned Fee Hearing pursuant to the Case Management 

Procedures.

i. Replies to objections to Interim Fee Applications, if any, may be submitted 

pursuant to the Case Management Procedures.

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j. The Court shall schedule a hearing on Interim Fee Applications every four

months pursuant to the schedule outlined below (an “Interim Fee Hearing”). 

The fee hearings may be held in conjunction with or separately from an 

Omnibus Hearing Date in the Court’s discretion. If no Objections are timely

filed, and if the Fee Examiner issues the Fee Examiner Report (defined below) 

recommending approval of the Interim Compensation Applications in full or 

in part, the Court may grant an Interim Fee Application without a hearing.

k. The Fee Examiner shall issue a letter report to each Professional listing and

explaining each reduction to the Professional’s fees and disbursements that

the Fee Examiner recommends, and shall file a report at least seven calendar

days before such hearing, which report shall disclose the consensual 

resolution with each Professional and each issue and amount not resolved

(the “Fee Examiner Report”).

l. The first Interim Fee Period shall cover the month in which the Petition Date

of the Commonwealth’s Title III Case occurred and the four full months 

immediately following such month. Accordingly, the first Interim Fee Period

shall cover May 3, 2017, through September 30, 2017. Each Professional

must file and serve its Interim Fee Application on or before the 45th day

following the end of the applicable Interim Fee Period, with the exceptions 

outlined in the following schedule:

Fee Period First Interim

May 3, 2017 –

September 30, 

2017

Second Interim

October 1, 2017 

– January 31, 

2018

Third Interim

February 1, 

2018 – May 31, 

2018

Fourth Interim

June 1, 2018 –

September 30, 

2018

End of Interim 

Compensation 

Period

September 30, 

2017

January 31, 

2018

May 31, 2018 September 30, 

2018

Interim Fee 

Applications

Due

December 15, 

2017

March 19, 2018 July 16, 2018 November 16, 

2018

Initial Letter 

Report to 

Retained 

Professionals

February 15, 

2018

May 18, 2018 September 14, 

2018

January 14, 

2019

Final 

(Summary) 

Report Filed

February 28,

2018 (or 7 days 

prior to 

scheduled 

hearing date)

May 30, 2018 

(or 7 days prior 

to scheduled 

hearing date)

October 31, 

2018 (or 7 days 

prior to 

scheduled 

hearing date)

March 6, 2019 

(or 7 days prior 

to scheduled 

hearing date)

Estimated 

Interim Fee 

Hearing Date

March 7, 2018

(Omnibus 

Hearing) or an 

earlier date as 

ordered by the 

Court

June 6, 2018 

(Omnibus 

Hearing) or an 

earlier date as 

ordered by the 

Court

November 7, 

2018 (Omnibus 

Hearing) or an 

earlier date as 

ordered by the 

Court

March 13, 2019 

(Omnibus

Hearing) or an 

earlier date as 

ordered by the 

Court

m. The pendency of an Objection to payment of compensation or reimbursement

of expenses shall not disqualify a Professional from the future payment of 

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compensation or reimbursement of expenses under the First Amended 

Interim Compensation Procedures. Any Professional that fails to submit a

Monthly Fee Statement or file an Interim Fee Application when due or

permitted shall be ineligible to receive further interim payments of fees or

reimbursement of expenses under the First Amended Interim Compensation

Procedures until such time as a Monthly Fee Statement or Interim Fee

Application issubmitted by the Professional. There shall be no other penalties 

for failing to file a Monthly Fee Statement or an Interim Fee Application in a

timely manner.

n. Payment and allowance of interim fees shall not bind any party in interest

or the Court with respect to the final allowance of applications for payment of 

compensation and reimbursement of expenses of Professionals. All fees 

and expenses paid to Professionals under the Interim Compensation

Procedures are subject to disgorgement until final allowance by the Court.

o. For all Professionals (except as otherwise agreed to by the Fee Examiner),

any application made pursuant to PROMESA sections 316 and 317, shall

be subject to Appendix A (non-attorney Professionals) or Appendix B 

(attorney-Professionals) of the U.S. Trustee’s Guidelines for Reviewing

Applications for Compensation and Reimbursement of Expenses Filed Under

11 U.S.C. § 330 by Attorneys in Large Chapter 11 Cases Effective as of

November 1, 2013 (the “U.S. Trustee Guidelines”), as applicable.

3. Notwithstanding anything to the contrary in this Order, this Order shall not apply to 

work of professionals that (a) was customarily required outside of the Title III Cases, excluding 

restructuring professionals who are performing legal, financial, or operational services for a Title III

Debtor, but including, for the avoidance of doubt, professionals performing services related to the

preparation of audited financial statements or (b) is related to post-Hurricane Maria services and is 

being billed in conformance with the Federal Emergency Management Agency’s reimbursement 

guidelines and rules related thereto, and such professionals shall be exempt from the requirements

of applying for Court approval of their fees and reimbursements that were customarily required 

outside Title III.

4. Each member of any statutory committee is permitted to submit statements of 

expenses (excluding third-party professional expenses of individual committee members) and 

supporting vouchersto the respective committee’s counsel, which counselshall collect and submit for 

reimbursement in accordance with the Interim Compensation Procedures.

5. Notice of interim and final fee applications is limited to (a) the Notice Parties (b) the 

Fee Examiner, and (c) all parties that have filed a notice of appearance with the Clerk of this

Court, pursuant to Bankruptcy Rule 2002 and applicable provisions of the Local Rules, and requested 

such notice.

6. The Notice Parties and the Fee Examiner shall receive the Monthly Fee Statements,

any Interim Fee Applications, any final fee applications, and any Hearing Notices, and all other

parties entitled to notice pursuant to this Order shall only receive the Hearing Notices.

7. The amount of fees and disbursements sought shall be set out in U.S. dollars.

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8. All time periods set forth in this Order shall be calculated in accordance with

Bankruptcy Rule 9006(a).

Compliance with Puerto Rico Law

9. Each Professional in the Title III Cases shall comply with Puerto Rico tax withholding 

law, to the extent applicable to such Professional. 

10. Each Professional’s written contract with its client regarding the services to be 

rendered in these Title III Cases shall be provided to the Department of Treasury by sending such 

contract to Reylam Guerra Goderich (Reylam.Guerra@hacienda.pr.gov) and Omar E. Rodríguez 

Pérez, CPA (Rodriguez.Omar@hacienda.pr.gov) and shall be published by the Department of 

Treasury on its web page; provided, however, that Professionals who are paid directly by a public 

corporation that is a Title III debtor, including the Puerto Rico Electric Power Authority, do not need 

to comply with the requirements of this paragraph. Any Professional without a written contract

regarding the services to be rendered in these Title III Cases shall enter into one with its client and 

send it to the Department of Treasury within 30 days of this Order.

11. In addition to existing requirements under the guidelines set by the Fee Examiner and 

the U.S. Trustee Guidelines, all Monthly Fee Statements shall include the following:

a. A certification by the Professional stating the following: 

“I hereby certify that no public servant of the Department of Treasury is a 

party to or has any interest in the gains or benefits derived from the contract 

that is the basis of this invoice. The only consideration for providing services 

under the contract is the payment agreed upon with the authorized 

representatives of [client]. The amount of this invoice is reasonable. The 

services were rendered and the corresponding payment has not been made. To 

the best of my knowledge, [professional] does not have any debts owed to the 

Government of Puerto Rico or its instrumentalities.”

and

b. A certification from a principal responsible for the retention of the professional

that authorizes the submission of the Monthly Fee Statement (a “Principal 

Certification”).

With respect to Professionals paid directly by public corporations that are Title III debtors, including 

the Puerto Rico Electric Power Authority, the certification required by subsection (a) above shall 

substitute “no employee of the [applicable public corporation],” in place of “no public servant of the 

Department of Treasury.”

12. Within 60 days of entry of this Order, all Professionals shall submit to the entity that 

pays such professional (the Department of Treasury or the applicable public corporation) a letter with

a retroactive Principal Certification for all Monthly Fee Statements submitted through the date of this 

Order, to the extent such Monthly Fee Statements do not already include a statement substantially 

similar to the Principal Certification.

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13. All Professionals shall segregate their invoices by Debtor and by whether the services 

were rendered in Puerto Rico or outside of Puerto Rico. 

14. All Professionals shall submit to the Department of Treasury non-binding, 

confidential fee estimates for professional services to be rendered in the following fiscal years (from 

July 1 to June 30), which shall be detailed by each Debtor. Such fee estimates shall not be subject to 

review or approval by the Department of Treasury. With respect to Professionals paid directly by 

public corporations that are Title III debtors, including the Puerto Rico Electric Power Authority,

such Professionals shall submit their fee estimates to the applicable public corporation.

Cooperation of Retained Professionals

15. This Order applies to all Professionals retained in these cases by the Debtors, the 

Government and AAFAF (as it relates to the Debtor entities in the Title III Cases), the Oversight 

Board (as representative of the Debtors), and the statutory committees, to the extent the Professionals 

render services in the Title III Cases.

16. Nothing alters or impairs the right of any party in interest in these cases to object to 

any applications subject to this Order.

17. Nothing herein is intended to, shall constitute, or shall be deemed to constitute the 

Oversight Board’s consent, pursuant to PROMESA section 305, to this Court’s interference with (a)

any of the political or governmental powers of the Debtors, (b) any of the property or revenues of the 

Debtors, or (c) the use or enjoyment of the Debtors of any income-producing property.

18. The Debtors and the Oversight Board, asthe Debtors’ representative, are authorized to

take all actions, and to execute all documents, necessary or appropriate, to effectuate the relief 

granted in this Order in accordance with the Motion.

19. This Court retains exclusive jurisdiction with respect to all matters arising from or 

related to the implementation, interpretation, and enforcement of this Order.

20. This Order resolves Docket Entry No. 3133 in Case No. 17-3283.

SO ORDERED.

Dated: June 6, 2018

 /s/ Laura Taylor Swain 

LAURA TAYLOR SWAIN

United States District Judge

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