01:23216347.3 

Hearing Date: June 6, 2018 at 9:30 a.m. (AST)

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) 

This Document Relates to: 

17 BK 3283 

Re: ECF No. 3066 

POPULAR, INC., POPULAR SECURITIES LLC, AND BANCO POPULAR DE 

PUERTO RICO’S OBJECTION AND JOINDER WITH RESPECT TO THE 

COMMITTEE’S RENEWED BANKRUPTCY RULE 2004 MOTION 

To the Honorable Magistrate Judge Judith Gail Dein: 

Popular, Inc. (“Popular”), Popular Securities LLC (“Popular Securities”), and Banco 

Popular de Puerto Rico (“Banco Popular,” and collectively with Popular and Popular Securities, 

the “Popular Entities”) respectfully submit this objection and reservation of rights (this 

“Objection”) with respect to the Renewed Motion of Creditors’ Committee Seeking Entry of 

Order, Under Bankruptcy Rule 2004, Authorizing Discovery Program With Respect to Certain 

Causes of Puerto Rico Financial Crisis Beginning on August 15, 2018 [ECF No. 3066] (the 

 

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). 

Case:17-03283-LTS Doc#:3128 Filed:05/23/18 Entered:05/23/18 15:59:57 Desc: Main

Document Page 1 of 6
2 

01:23216347.3 

“Renewed Motion”).2 In support of this Objection, the Popular Entities respectfully state as 

follows: 

1. Through the Renewed Motion, the Committee once again seeks to commence a 

wide-ranging discovery program against the Government Development Bank, the Santander 

entities, and the Popular Entities. The Committee’s requested Rule 2004 discovery of the 

Popular Entities and the other parties to be examined is premature at best, unduly burdensome 

and potentially unnecessary, as it may be obviated in large part by the discovery currently being 

conducted by Kobre & Kim, LLP, the Oversight Board’s independent investigator (the 

“Independent Investigator”). As part of that ongoing investigation, the Committee will have 

access to all documents produced by the Popular Entities to the Independent Investigator. For 

these very reasons, the Court previously denied3 the Committee’s initial Motion [ECF No. 706], 

thus allowing the Independent Investigator to proceed with its investigative work and preventing 

any unnecessary duplication of efforts. 

2. Furthermore, and as noted by the Santander entities in their own objection, the 

concerns prompting the Renewed Motion are entirely speculative in nature, and the Independent 

Investigator’s investigation should be completed before considering the requests in the Renewed 

Motion. The Court should not grant the Renewed Motion based only on the Committee’s 

supposition about the remaining time to complete the Independent Investigator’s report or the 

thoroughness and ultimate contents of that report.4 

 

2

 Capitalized terms used but not otherwise defined in this Objection shall have the meanings ascribed to them in 

the Renewed Motion. 

3

 See November 17, 2017 Order Denying Committee’s Rule 2004 Motion Without Prejudice [ECF No. 1827]. 

4

 See, e.g., In re Express One Int’l, Inc., 217 B.R. 215, 217 (Bankr. E.D. Tex. 1998) (“If the cost and disruption to 

the person being examined outweigh the benefits to the examiner, the examination should be denied.”).

Case:17-03283-LTS Doc#:3128 Filed:05/23/18 Entered:05/23/18 15:59:57 Desc: Main

Document Page 2 of 6
3 

01:23216347.3 

3. In fact, it is the Popular Entities’ understanding that the Independent Investigator 

is diligently and thoroughly conducting its investigation, and the record of these cases supports 

that. In its April 5 Report, the Independent Investigator disclosed that it had conducted over 100 

witness interviews and had collected voluminous documentation from various entities. For their 

part, the Popular Entities have been working cooperatively with the Independent Investigator and 

are complying with its multiple discovery requests,5 including by making several employees 

available for interviews by the Independent Investigator in connection with its ongoing 

investigation of Puerto Rico’s public debt offerings. 

4. The Popular Entities have already produced, and intend to continue to produce, a 

substantial number of documents in response to the Independent Investigator’s document 

requests – the Popular Entities’ review and production is comprised of tens of thousands of 

documents. The Popular Entities are aware that the Committee and the Retirees’ Committee 

each have signed cooperation and non-disclosure agreements with the Independent Investigator.6 

As a result, the Committee and the Retirees’ Committee will have access to all documents 

produced by the Popular Entities to the Independent Investigator and the Committee should be 

required to review those documents first before pursuing its own duplicative requests.7

5. The Independent Investigator presumably also is taking extensive discovery of the 

Government Development Bank, the Santander entities, and other parties in furtherance of its 

investigative work. Given the breadth of the discovery being conducted by the Independent 

 

5

 The Popular Entities understand that many of the document requests directed to them in the Investigator’s 

supplemental investigative subpoenas, dated December 19, 2017, were provided to the Investigator by the 

Committee, as contemplated by the Order denying the Motion. See ECF No. 1827, ¶ 2.

6

 See, e.g., Exhibit F to Renewed Motion. 

7

 See, e.g., In re MF Global Holdings Ltd., 465 B.R. 736, 743-44 (Bankr. S.D.N.Y. 2012) (denying discovery 

request pursuant to Rule 2004 because another party was already conducting its own independent investigation 

regarding similar facts and potential claims, as allowing such discovery would be “unnecessary and would 

hinder ongoing investigations.”).

Case:17-03283-LTS Doc#:3128 Filed:05/23/18 Entered:05/23/18 15:59:57 Desc: Main

Document Page 3 of 6
4 

01:23216347.3 

Investigator, as well as the ambitious scope and multiple purposes of its investigation, it should 

be no surprise that the Independent Investigator’s work remains ongoing and that its final report 

has not yet been completed. The Committee’s apparent impatience with the thorough and 

extensive investigation being performed by the Independent Investigator is no reason for the 

Court to reconsider its previous decision and to grant the Committee’s premature Renewed 

Motion. Permitting the Committee to perform its own parallel investigation would unnecessarily 

expend the Commonwealth’s resources, potentially impede the Independent Investigator’s own 

investigations, and inevitably subject the Popular Entities and others to undue burden and 

expense by requiring them to respond to duplicative and possibly unnecessary discovery 

requests.8

 

6. The Popular Entities respectfully submit that the Committee should review the 

documents that the Popular Entities are producing to the Independent Investigator and wait for 

the Independent Investigator to issue its final report before seeking authority under Rule 2004 to 

pursue additional discovery from the Popular Entities. After the Independent Investigator 

releases its final report, the Court, the Committee, the Popular Entities and the other parties from 

which the Committee seeks discovery will be better positioned to evaluate whether and to what 

extent additional discovery is warranted, and the Committee will be better positioned to propose 

tailored, non-duplicative discovery requests. The Renewed Motion should therefore be denied as 

premature. 

 

8

 “In evaluating a request to conduct a Rule 2004 examination, the Court must ‘balance the competing interests of 

the parties, weighing the relevance and necessity of the information sought by examination.” In re AOG 

Entm’t, Inc., 558 B.R. 98, 109 (Bankr. S.D.N.Y. 2016).

Case:17-03283-LTS Doc#:3128 Filed:05/23/18 Entered:05/23/18 15:59:57 Desc: Main

Document Page 4 of 6
5 

01:23216347.3 

JOINDER AND RESERVATION OF RIGHTS 

7. The Popular Entities hereby fully join and adopt herein (i) the Objection of 

Debtors to Renewed Motion of Official Committee of Unsecured Creditors for Entry of an Order, 

Under Bankruptcy Rule 2004, Authorizing Discovery Program With Respect to Certain Causes 

of Puerto Rico Financial Crisis Beginning on August 15, 2018 [ECF No. 3117] (the “Debtors’ 

Objection”) filed by the Oversight Board on behalf of the Debtors and (ii) the Objection of 

Santander Securities LLC, Santander Asset Management LLC and Banco Santander Puerto Rico 

to Renewed Motion of Creditors’ Committee Seeking Entry of Order, Under Bankruptcy Rule 

2004, Authorizing Discovery Program With Respect to Certain Causes of Puerto Rico Financial 

Crisis Beginning on August 15, 2018 [ECF No. 3120] (the “Santander Objection,” and together 

with the Debtors’ Objection, the “Renewed Objections”). In the Debtors’ Objection, the 

Oversight Board made clear that the Committee, under the cooperation and non-disclosure 

agreement, already has access to the vast majority of documents embodied in its requests and 

that a parallel investigation would be duplicative, burdensome, and unnecessary. The Santander 

Objection additionally makes clear that the relief requested in the Renewed Motion would 

subject the parties to simultaneous conflicting obligations, imposing unnecessary burdens on 

those parties from whom discovery is requested. 

8. As is evident from this Objection and the Renewed Objections, the duplicative 

discovery requested in the Renewed Motion is premature, unnecessary, and burdensome on the 

Commonwealth’s resources, the Popular Entities and many others. Accordingly, the Renewed 

Motion should be denied. 

9. To the extent necessary, the Popular Entities expressly reserve all rights and 

objections with respect to the proposed Document Requests. The Popular Entities also reserve 

Case:17-03283-LTS Doc#:3128 Filed:05/23/18 Entered:05/23/18 15:59:57 Desc: Main

Document Page 5 of 6
6 

01:23216347.3 

the right to join in and adopt as their own any other objections to the Renewed Motion, 

including, without limitation, any objections filed by AAFAF, the Government Development 

Bank, or any of their agents. 

Dated: May 23, 2018 

San Juan, Puerto Rico Respectfully submitted, 

S/ Angélica Toro-Lavergne 

 USDC-PR Bar No. 214804 

 Popular Center-9th Floor 

 209 Muñoz Rivera Ave. 

 San Juan, P.R. 00918 

 Tel. 787-753-1017 

 Fax 787-754-4984 

 E-mail: Angélica.Toro@popular.com 

-andYOUNG CONAWAY STARGATT 

& TAYLOR, LLP 

/s/ Robert S. Brady 

James L. Patton (admitted pro hac vice) 

Robert S. Brady (admitted pro hac vice) 

John T. Dorsey (admitted pro hac vice) 

1000 North King Street 

Wilmington, Delaware 19801 

Telephone: (302) 571-6600 

Facsimile: (302) 571-1253 

Counsel to Popular, Inc., Popular Securities LLC, 

and Banco Popular de Puerto Rico 

Case:17-03283-LTS Doc#:3128 Filed:05/23/18 Entered:05/23/18 15:59:57 Desc: Main

Document Page 6 of 6