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)

Re: ECF No. 21187

EVERTEC GROUP, LLC,

Movant,

 -againstTHE FINANCIAL OVERSIGHT AND 

MANAGEMENT BOARD FOR PUERTO RICO,

as representative of

THE COMMONWEALTH OF PUERTO RICO, et al.,

Respondents.

DEBTOR’S OBJECTION TO MOVANT EVERTEC’S MOTION 

FOR ALLOWANCE OF AN ADMINISTRATIVE EXPENSE CLAIM

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 (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 (“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).

134047688v5

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

The Puerto Rico Public Buildings Authority (“PBA” or the “Debtor”), by and through the 

Financial Oversight and Management Board for Puerto Rico (the “Oversight Board”), as the 

Debtor’s sole Title III representative pursuant to Section 315(b) of the Puerto Rico Oversight, 

Management, and Economic Stability Act (“PROMESA”),2 respectfully submit this objection (the 

“Objection”) to Evertec’s Motion for Allowance of an Administrative Expense Claim [ECF No. 

21187] (the “Motion”), filed by Evertec Group, LLC (“Movant”). In support of the Objection, the 

Debtor respectfully represents:

PRELIMINARY STATEMENT

1. It is axiomatic that an administrative expense claim should only be allowed if the 

claim’s proponent demonstrates a benefit conferred onto the bankruptcy estate. Here, Movant 

seeks compensation for maintenance and replacement services allegedly provided pursuant to a 

contract with PBA. Yet, Movant cannot produce a foundational piece of information: proof these 

services were actually provided to PBA. The limited information that Movant did provide to the 

Debtor and the Oversight Board shows, at best, that Movant obtained goods and services to operate 

its own business, but fails to show how services were provided to and benefitted PBA. The Debtor 

also undertook, since the filing of the Motion, a review of its books and records to determine

whether Movant actually provided services to PBA, but has been unable to locate relevant 

information that would support Movant’s asserted claim. Since Movant failed to meet its burden 

of proving a benefit conferred onto PBA, the Motion should be denied. 

2

 PROMESA has been codified at 48 U.S.C. §§ 2101–2241. 

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BACKGROUND

2. On May 3, 2017, the Commonwealth filed a petition pursuant to Title III of 

PROMESA to commence its Title III case. 

3. On September 27, 2019, PBA filed a petition pursuant to Title III of PROMESA to 

commence its Title III case.

4. On November 30, 2020, PBA and Movant entered into that certain Services 

Agreement for services to be provided during the period from November 30, 2020 to June 30, 

20213 (the “2021 Contract”). Specifically, Movant agreed to provide “(i) maintenance for 

hardware & software of Fortinet and Avaya products, (ii) maintenance of hardware for the Cisco 

platform, [and] (iii) replacement of parts for the term specified in the pricing section [of the 2021 

Contract].” Motion Ex. B at 1. In return, PBA agreed to pay Movant up to $69,017.23 as 

compensation. Id. at 2. 

5. On May 27, 2021, Movant sent an invoice to the PBA for $69,017.23. Motion Ex. 

C at 1 (the “Invoice”). The Invoice references the 2021 Contract and lists the items for which 

Movant seeks reimbursement: “Avaya Maintenance” ($38,280.26); “Cisco Maintenance” 

($19,054.84); “Fortinent Maintenance” ($7,601.13); and “Evertec Maintenance Labor” 

($4,080.00). Id. 

6. On January 18, 2022, the Court entered the Order and Judgment Confirming 

Modified Eighth Amended Title III Joint Plan of Adjustment of the Commonwealth of Puerto Rico, 

the Employees Retirement System of the Government of the Commonwealth of Puerto Rico, and 

the Puerto Rico Public Buildings Authority [ECF No. 19813] (the “Confirmation Order”), 

confirming the Modified Eighth Amended Title III Joint Plan of Adjustment of the Commonwealth 

3 PBA did not renew the 2021 Contract following its expiration.

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of Puerto Rico, et al., [ECF No 19784] (as amended, supplemented, or modified, the “Plan”).4

 

Section 92.2 of the Plan discharged and released the Debtor from “any and all Claims, Causes of 

Action, and any other debts that arose, in whole or in part, prior to the Effective Date.” Plan § 

92.2(a). 

7. Decretal paragraph 44 of the Confirmation Order provides that “[t]he last day to 

file proof of Administrative Expense Claims shall be ninety (90) days after the Effective Date, 

after which date, any Administrative Expense Claim, proof of which has not been filed, shall be 

deemed forever barred, and the Debtors and Reorganized Debtors shall have no obligations with 

respect thereto.” The deadline to file proofs of Administrative Expense Claims was June 13, 2022, 

which was extended to January 18, 2023 for certain parties. 

8. On June 11, 2022, Movant filed the Motion, seeking allowance of an administrative 

expense claim of $69,017.23 (the “Claim”), and a proof of Administrative Expense Claim (POC 

No. 180374).

ARGUMENT

I. The Motion Does Not Establish Entitlement to Allowance for the Asserted Claim

9. Parties seeking administrative priority status for their claims must establish a right 

to reimbursement under applicable law. See Grogan v. Garner, 498 U.S. 279, 283 (1991) (“The 

validity of a creditor’s claim is determined by rules of state law”); In re Bos. Reg’l Med. Ctr., 256 

B.R. 212, 220 (Bankr. D. Mass. 2000), aff’d sub nom. Mass. Div. of Emp. & Training v. Bos. Reg’l 

Med. Ctr., Inc. (In re Bos. Reg’l Med. Ctr., Inc.), 265 B.R. 838 (B.A.P. 1st Cir. 2001), aff’d on 

other grounds, 291 F.3d 111 (1st Cir. 2002) (“In determining whether an obligation arising under 

state law is a tax under the Bankruptcy Code, courts must look to state law to understand the 

4 Unless otherwise defined herein, capitalized terms shall have the meanings ascribed thereto in the Plan. 

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characteristics and incidents of the obligation . . . .”); see also In re Fin. Oversight & Mgmt. Bd. 

for P.R., No. 17-bk-4780, 2022 WL 1401506, at *4 (D.P.R. May 4, 2022) (“Motion for 

administrative expense treatment fails because [movant] has not demonstrated that it has a 

contractual right to reimbursement of the Expenses . . . .”). To the extent they are not, the asserted 

costs do not constitute “actual, necessary costs and expenses of preserving” the Commonwealth. 

11 U.S.C. § 503(b)(1)(A)(i). 

10. “‘The burden of proving entitlement to priority payment as an administrative 

expense . . . rests with the party requesting it,’ and the Court has broad discretion in determining 

whether to grant a request for such priority treatment.” In re Fin. Oversight & Mgmt. Bd. for P.R., 

631 B.R. 596, 604 (D.P.R. 2021) (quoting Woburn Assocs. v. Kahn (In re Hemingway Transp., 

Inc.), 954 F.2d 1, 5 (1st Cir. 1992)); see also In re Jeans.com, 491 B.R. 16, 23 (Bankr. D.P.R. 

2013). A party seeking administrative expense treatment must show a “clear relationship between 

the expenditures made and the benefit conferred on the estate . . . .” In re Drexel Burnham Lambert 

Grp., 134 B.R. 482, 489 (Bankr. S.D.N.Y. 1991) (citations omitted).

11. As articulated by Movant, satisfaction of this burden requires a showing that the 

right to payment “(1) [arose] from a transaction with the trustee or debtor in possession, rather than 

from a prepetition transaction with the debtor, and (2) the consideration supporting the claim must 

have benefitted the estate in some demonstrable way.” Motion ¶ 10 (emphasis added) (quoting In 

re FBI Distrib. Corp., 330 F.3d 36, 42 (1st Cir. 2003)). Here, Movant has failed to demonstrate

that it actually performed the services specified in the 2021 Contract and conferred a benefit to the 

Debtor, despite being afforded ample opportunity to do so. Movant’s inability to meet this 

seemingly simple request necessitates this Objection. 

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12. Following the filing of the Motion, the Debtor requested from Movant a report 

demonstrating the services were actually provided, but, Movant has failed to provide such report 

or otherwise provide proof Movant performed the duties for which it seeks compensation.5 The 

limited information Movant did provide consists of invoices for goods and services provided to 

Movant from third parties. However, such information fails to show how Movant provided 

services to PBA and how PBA was benefitted by those purported services.

13. PBA also undertook a review of its books and records to locate any information 

that may support Movant’s asserted claim, but was unable to find any.

14. Unless and until Movant provides evidence it performed the maintenance and 

replacement services contemplated in the 2021 Contract, Movant cannot satisfy the requirements 

for administrative priority status for its asserted claim. 

WHEREFORE the Debtor respectfully requests the Court deny the Motion and grant it 

such other and further relief as is just.

Dated: June 2, 2023

San Juan, Puerto Rico

Respectfully submitted, 

/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 

-and-

/s/ Luis F. del Valle-Emmanuelli

Luis F. del Valle-Emmanuelli 

USDC-PR No. 209514

P.O. Box 79897

5 The Debtor reserves the right to supplement this objection to the extent Movant subsequently provides any 

additional factual support for its asserted claim.

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Carolina, Puerto Rico 00984-9897 

Tel: (787) 647-3503

OF COUNSEL FOR

A&S LEGAL STUDIO, PSC

434 Avenida Hostos San Juan, PR 00918

Tel: (787) 751-6764 / 763-0565

Fax: (787) 763-8260

Attorneys for the Financial Oversight and 

Management Board as representative for the 

Debtors

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