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) 

This filing relates to the 

Commonwealth and HTA. 

REPLY OF THE COMMONWEALTH OF PUERTO RICO AND THE PUERTO RICO 

HIGHWAYS AND TRANSPORTATION AUTHORITY TO RESPONSE FILED BY 

EFRAIN MÁRQUEZ GUZMÁN [ECF NO. 22852] TO THE FIVE HUNDRED THIRTYSEVENTH OMNIBUS OBJECTION (SUBSTANTIVE) TO DUPLICATE 

AND NO LIABILITY BOND CLAIMS 

To the Honorable United States District Judge Laura Taylor Swain: 

The Commonwealth of Puerto Rico (the “Commonwealth”) and the Puerto Rico Highways 

and Transportation Authority (“HTA,” and together with the Commonwealth, the “Debtors”), by 

and through the Financial Oversight and Management Board for Puerto Rico (the “Oversight 

Board”), as the sole Title III representative of the Debtors pursuant to Section 315(b) of the Puerto 

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 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); (v) Puerto Rico Electric Power Authority (“PREPA”) 

(Bankruptcy Case No. 17- BK-4780-LTS) (Last Four Digits of Federal Tax ID: 3747); and (vi) 

Puerto Rico Public Buildings Authority (“PBA”) (Bankruptcy Case No. 19-BK-5523-LTS) (Last 

Four Digits of Federal Tax ID: 3801) (Title III case numbers are listed as Bankruptcy Case 

numbers due to software limitations). 

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Rico Oversight, Management, and Economic Stability Act (“PROMESA”),2 file this reply (the 

“Reply”) to the untitled response [ECF. No. 22852] (the “Márquez Guzmán Response”) filed by 

claimant Efraín Márquez Guzmán (“Márquez Guzmán”), in support of the Five Hundred ThirtySeventh Omnibus Objection (Substantive) of the Commonwealth of Puerto Rico and the Puerto 

Rico Highways and Transportation Authority to Duplicate and No Liability Bond Claims [ECF 

No. 22740] (the “Five Hundred Thirty-Seventh Omnibus Objection”). The Debtors respectfully 

represent as follows: 

1. On October 28, 2022, the Debtors filed the Five Hundred Thirty-Seventh Omnibus 

Objection. The Five Hundred Thirty-Seventh Omnibus Objection seeks to disallow, in their 

entirety, certain proofs of claim, each of which purports to be based, in part, on (a) bond claims 

that are duplicative of one or more master proofs of claim filed against the Debtors on behalf of 

the holders of certain bonds, (b) bond claims based on bonds issued by HTA which have been 

discharged pursuant to the Confirmation Order (defined below), (c) an ownership interest in bonds 

issued by the Puerto Rico Housing Finance Authority (“PRHFA”) or the Puerto Rico Public 

Finance Authority (“PRPFC”) for amounts for which the Debtors are not liable because: (i) the 

issuing entities are not Title III Debtors and have not guaranteed repayment for the bonds; (ii) the 

bonds at issue have matured; and/or (iii) the claimants do not sufficiently allege the Debtors were 

obligated with respect to such bonds; and/or (d) investments in mutual funds, which in turn may 

have invested in bonds issued by the Debtors. 

2. Any party who disputed the Five Hundred Thirty-Seventh Omnibus Objection was 

required to file a response by 4:00 p.m. (Atlantic Standard Time) on November 28, 2022, in 

accordance with the Court-approved notice attached to the Five Hundred Thirty-Seventh Omnibus 

2

 PROMESA is codified at 48 U.S.C. §§ 2101-2241. 

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Objection as Exhibit C, which was served in English and Spanish on the individual creditors 

subject to the Five Hundred Thirty-Seventh Omnibus Objection, the U.S. Trustee, and the Master 

Service List (as defined in the Sixteenth Amended Case Management Order [ECF No. 20190-1]). 

See Certificate of Service [ECF No. 22938]. 

3. Claimant Márquez Guzmán filed a proof of claim against the Commonwealth on 

April 18, 2018, which was logged by Kroll Restructuring Administration LLC as Proof of Claim 

No. 7743 (the “Márquez Guzmán Claim”). The Márquez Guzmán Claim asserts liabilities in an 

amount of $300,000 based on an ownership interest in (a) certain mutual funds which, in turn, may 

have invested in various bonds issued by the Debtors; (b) certain bonds issued by the Puerto Rico 

Industrial Development Company (“PRIDCO”); and (c) certain bonds issued by PRPFC. The 

Márquez Guzmán Claim also attaches as supporting documentation a portion of Márquez 

Guzmán’s Santander brokerage statement. 

4. On November 10, 2022, Márquez Guzmán filed the Márquez Guzmán Response. 

Therein, Márquez Guzmán attaches certain pages from the Five Hundred Thirty-Seventh Omnibus 

Objection and asserts he “do[es] not agree” with the objection and “would like to have the specific 

reasons explained to us and if there is any opportunity to recover some of what the government 

defrauded us of.” Márquez Guzmán Response at 1. 

5. The Márquez Guzmán Response does not dispute that the Márquez Guzmán Claim 

is based in part on investments in mutual funds, which, in turn, may have purchased bonds issued 

by the Debtors. The Márquez Guzmán Response also does not dispute that, because Márquez 

Guzmán is an investor in one or more mutual funds that in turn may have invested in bonds issued 

by the Debtors, the Márquez Guzmán Claim is derivative of claims that must be asserted by the 

mutual funds directly for any claimed recovery to be considered by the Court. See, e.g., S. Blvd., 

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Inc. v. Martin Paint Stores, 207 B.R. 57, 61 (S.D.N.Y. 1997) (holding that, under the Bankruptcy 

Code, a creditor is one who “has a claim against the debtor or the estate” rather than “a creditor of 

one of the debtor’s creditors.”). The Márquez Guzmán Response therefore does not articulate any 

basis upon which Márquez Guzmán, as an investor in a mutual fund, might assert a direct claim 

against the Debtors in respect of her investment in such mutual funds. 

6. Moreover, the Márquez Guzmán Response does not address the Debtors’ 

contention the PRIDCO bonds are duplicative of a Master Claim. Indeed, the Five Hundred 

Thirty-Seventh Omnibus Objection made clear that the Márquez Guzmán Claim asserts liabilities 

with respect to PRIDCO Bonds that are duplicative of the PRIDCO Master Proof of Claim3, and 

that any failure to disallow the portion of the Márquez Guzmán Claim pertaining to PRIDCO 

Bonds would result in Márquez Guzmán potentially receiving an unwarranted double recovery 

against the Debtors, to the detriment of other stakeholders in the Debtors’ Title III Cases. 

7. Likewise, the Five Hundred Thirty-Seventh Omnibus Objection established, and 

the Márquez Guzmán Response did not refute, that the Debtors are not liable for the portion of the 

Márquez Guzmán Claim asserting liabilities associated with PRPFC Bonds. The Márquez 

Guzmán Response does not address the Debtors’ contention that PRPFC is not a Title III debtor, 

and is a separate, legally distinct entity from the Debtors and that none of its liabilities are 

guaranteed by the Commonwealth, HTA, or any other Title III Debtor. See, 3 L.P.R.A. § 9081(c) 

(referring to PRPFC as an “independent juridical entity” separate from the Commonwealth). 

8. Accordingly, because Márquez Guzmán has not provided a basis for asserting the 

liabilities associated with the Márquez Guzmán Claim against the Debtors, the Debtors 

3

 Capitalized terms not otherwise defined herein shall have the meanings ascribed to them 

in the Five Hundred Thirty-Seventh Omnibus Objection. 

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respectfully request the Márquez Guzmán Claim be disallowed in its entirety and that the Court 

grant the Five Hundred Thirty-Seventh Omnibus Objection, notwithstanding the Márquez Guzmán 

Response. 

Dated: April 11, 2023 Respectfully submitted, 

 San Juan, Puerto Rico 

/s/ Hermann D. Bauer 

Hermann D. Bauer 

USDC No. 215205 

Carla García Benítez 

USDC No. 203708 

O’NEILL & BORGES LLC 

250 Muñoz Rivera Ave., Suite 800 

San Juan, PR 00918-1813 

Tel: (787) 764-8181 

Fax: (787) 753-8944 

/s/ Brian S. Rosen 

Martin J. Bienenstock (pro hac vice) 

Brian S. Rosen (pro hac vice) 

PROSKAUER ROSE LLP

Eleven Times Square 

New York, NY 10036 

Tel: (212) 969-3000 

Fax: (212) 969-2900 

Attorneys for the Financial Oversight and 

Management Board for the Puerto Rico, as 

representative for the Commonwealth and 

the Puerto Rico Highways and 

Transportation Authority

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