IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF PUERTO RICO

In re:

THE FINANCIAL OVERSIGHT AND 

MANAGEMENT BOARD FOR PUERTO 

RICO,

as a 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 ELECTRIC POWER 

AUTHORITY

(“PREPA”),

Debtor.

PROMESA

Title III

No. 17 BK 4780-LTS

This document relates to

PREPA Title III case only

SIEMENS TRANSPORTATION PARTNERSHIP PUERTO RICO, S.E.’S LIMITED 

OBJECTION WITH RESPECT TO THE URGENT MOTION FOR POSTPETITION 

SECURED FINANCING, PRIMING LIENS, AND PROVIDING SUPERPRIORITY

ADMINISTRATIVE EXPENSE CLAIMS

 

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 the (i) Commonwealth of Puerto Rico (Bankruptcy Case No. 17-BK3283 (LTS)) (Last Four Digits of Federal Tax ID: 3481), (ii) 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), (iii) Puerto Rico Highways and Transportation Authority (“HTA”) (Bankruptcy Case 

No. 17-BK-3567 (LTS)) (Last Four Digits of Federal Tax ID: 3808), and (iv) Puerto Rico Sales Tax Financing 

Corporation (“COFINA”) (Bankruptcy Case No. 17-BK-3284 (LTS)) (Last Four Digits of Federal Tax ID: 

8474).

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To the Honorable United States District Court Judge Laura Taylor Swain:

Siemens Transportation Partnership Puerto Rico, S.E. (“Siemens”), creditor and party in 

interest, respectfully submits this limited objection (the “Limited Objection”) with respect to the 

Urgent Joint Motion of the Financial Oversight and Management Board for Puerto Rico and the 

Puerto Rico Fiscal Agency and Financial Advisory Authority for Entry of Interim and Final 

Order (A) Authorizing Postpetition Secured Financing, (B) Granting Priming Liens and 

Providing Superpriority Administrative Expense Claims, (C)Modifying the Automatic Stay, (D) 

Scheduling a Final Hearing, and (E) Granting Related Relief [PREPA Docket No. 549](the 

“Motion”).2 In support of its Limited Objection, Siemens respectfully states as follows. 

RELEVANT BACKGROUND

1. On May 3, 2017, the Financial Oversight and Management Board for Puerto Rico 

(the “Oversight Board”) commenced a title III case for the Commonwealth of Puerto Rico by 

filing a voluntary petition for relief pursuant section 304(a) of PROMESA section 304(a) (the 

“Commonwealth Title III Case”). 

2. On May 21, 2017, the Oversight Board commenced a title III case for relief under 

PROMESA on behalf of the Puerto Rico Highway and Transportation Authority or HTA (the 

“HTA Title III Case”).

3. Pursuant to an Order entered by the Court on June 29, 2017, the HTA Title III 

Case is jointly administered with, among others, the Commonwealth Title III Case, and the 

Commonwealth Title III case is the lead case. See Commonwealth Title III Case Docket No. 537.

4. Siemens is a creditor of the HTA and a party in interest in the HTA Title III Case.

 

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

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5. Siemens’ claim against the HTA is for unpaid funds due and owing to Siemens 

under a Settlement Agreement, between the HTA and Siemens effective May 28, 2010 (as 

amended from time to time, the “Settlement Agreement”).3In short, the Settlement Agreement 

resolves certain disputes concerning Siemens’ work performed on a construction project known 

as the Tren Urbano project and related litigation.

6. The Settlement Agreement requires HTA to make certain payments to Siemens, 

including a final “Completion Payment” of $13,000,000 and requires Siemens to complete 

construction on the Tren Urbano project. Siemens completed all work on the Tren Urbano 

project and the Completion Payment became due and owing in June, 2017.

7. HTA failed to make the final Completion Payment to Siemens. This is the basis of 

Siemens’ claim against HTA.

8. In connection with the Settlement Agreement, and to secure the Completion 

Payment and the other obligations of HTA under the Settlement Agreement, GDB guaranteed the 

obligations of HTA and in accordance with its obligation under the Settlement Agreement and 

other documents, ostensibly established an escrow account at GDBfor the benefit of Siemens.

9. GDB account number 200079 420 001 004 06 was created in Siemens’ name (the 

“Siemens Account”) in 2012 and was identified by GDB as an escrow account that contained 

funds in the amount of $13,000,000 earmarked for Siemens. 

10. For years, GDB consistently represented to Siemens that the Siemens Account 

was an escrow account containing $13,000,000. In GDB’s Opposition to Siemens’ request for a 

 

3 After the commencement of the HTA Title III Case, on or around June 5, 2017, HTA purported to enter into a 

Second Amendment to Settlement Agreement. The validity and enforceability of such Second Amendment to 

Settlement Agreement is not material to this Motion; however, Siemens reserves and preserves all rights and 

arguments with respect to the validity and enforceability of the Second Amendment to Settlement Agreement and 

nothing in this Motion shall be deemed a waiver with respect thereto. 

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Rule 2004 Examination, GDB asserted that the Siemens Account is not an escrow account; a 

statement that has since been reversed byGDB’s officer, Jose Santiago Ramos.

11. On November 17, 2017, the Court issued an Order authorizing Siemens to take 

discovery in the form of document production and one deposition limited to the issue of whether 

the funds held in the Siemens Account were being held in escrow [HTA Docket No. 338] (the 

“Order”). 

12. Pursuant to the Order, Siemens (i) reviewed documents produced by GDB with 

respect to the Siemens Account; and (ii) on January 30, 2018, deposed Jose Santiago Ramos, 

Executive Vice President and Chief Financing Officer of GDB.

13. On January 20, 2018, Mr. Ramos was deposed. During the deposition, Mr. 

Ramos repeatedly testified that the Siemens Account is an escrow account, in direct 

contravention to the statement made by GDB in its Opposition to Siemens’ Motion. Mr. Ramos 

further testified that the $13,000,000 is still held in the Siemens Account but GDB would not 

honor Siemens’ payment request, notwithstanding his agreement that the funds have been held in 

escrow for Siemens’ benefit since 2012. As of the date of this Motion, Siemens continues to 

evaluate the written discovery and will further evaluate the testimony of Mr. Ramos upon receipt 

of the deposition transcript, and is moving with appropriate haste in its attempt to recover its 

property unlawfully withheld.

LIMITED OBJECTION

14. Through the Motion, the Puerto Rico Electric Power Authority 

(“PREPA”)through the Oversight Board and the Puerto Rico Fiscal Agency and Financial 

Authority (“AAFAF”) jointly request Court authorization to obtain postpetition financing in the 

form of a $1.3 billion revolving line of credit from the Commonwealth of Puerto Rico on a 

superpriority administrative claim basis.

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15. The terms of the proposed financing contemplate use of collateral to secure 

PREPA’s obligations to the Commonwealth of Puerto Rico.

16. Siemens objects to the Motion only to the extent that the terms of the financing 

requested therein seeks to pledge, use as collateral, or otherwise encumber funds that are held by 

GDB for Siemens’ benefit, including the funds located in the Siemens Account. While Siemens 

does not believe that the Motion contemplates a lien on the Siemens Account or funds held 

therein, in an abundance of caution Siemens files this Limited Objection.

17. Because Siemens and GDB currently dispute whether any funds held by GDB for 

Siemens’ benefit, including the Siemens Account, are property to which Siemens is the rightful 

owner and therefore should be turned over the Siemens forthwith, it would be illegal and

improper to permit such funds to be pledged as collateral, transferred to anyone other than 

Siemens or otherwise encumbered. 

WHEREFORE, Siemens respectfully requests that the Court enter an Order reflecting 

the relief sought herein. 

[Rest of Page Left Blank Intentionally]

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Dated: February 1, 2018 Respectfully submitted,

SEPULVADO, MALDONADO & 

COURET

By: s/AlbénizCouret Fuentes

AlbénizCouret Fuentes

USDC-PR Bar No. 222207

s/José Javier Santos Mimoso

José Javier Santos Mimoso

USDC-PR Bar No. 208207

304 Ponce de León - Suite 990

San Juan, PR 00918

Telephone: 787-765-5656

Facsimile: 787-294-0073

Email: acouret@smlawpr.com 

 jsantos@smlawpr.com

Counsel for Siemens Transportation 

Partnership Puerto Rico, SE

and

REED SMITH LLP

Claudia Z. Springer

Andrew J. Soven

Three Logan Square

1717 Arch Street, Suite 3100

Philadelphia, PA, 19103

Telephone: (215) 851-8190

Facsimile: (215) 851-1420

E-mail: cspringer@reedsmith.com

Counsel for Siemens Transportation 

Partnership Puerto Rico, SE

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