Hearing Date: March 7, 2018 

USActive 41995808.5

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) 

RESERVATION OF RIGHTS OF ASSURED GUARANTY CORP. AND ASSURED 

GUARANTY MUNICIPAL CORP. WITH RESPECT TO PRELIMINARY OBJECTION 

OF OFFICIAL COMMITTEE OF UNSECURED CREDITORS TO MOTION OF PBA 

FUNDS FOR PAYMENT OF RENT 

Assured Guaranty Corp. (“AGC”) and Assured Guaranty Municipal Corp. (“AGM”, and 

together with AGC, “Assured”) respectfully submit this Reservation of Rights with respect to the 

Preliminary Objection of Official Committee of Unsecured Creditors to Motion of PBA Funds 

for Payment of Rent Dated February 13, 2018 [ECF No. 2586]. In support of its Reservation of 

Rights, Assured states as follows: 

Assured insures bonds (the “PBA Bonds”) issued by the Puerto Rico Buildings Authority 

(the “PBA”). 

On February 13, 2018, certain investment funds claiming to hold PBA Bonds 

(collectively, the “PBA Funds”) filed their Motion of the PBA Funds for the Payment of Rent

 

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 

(“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); 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). 

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(ECF No. 2492, the “Motion”), which asked the Court, among other things, to enter an order 

pursuant to section 365(d)(3) of the Bankruptcy Code directing the Debtors to (a) satisfy all 

outstanding postpetition rental obligations of the Debtors arising under leases with the PBA 

(collectively, the “PBA Leases”) and (b) timely perform all such obligations going forward until 

the Debtors assume or reject the PBA Leases. See Motion ¶ 27. 

On February 23, 2018, the Official Committee of Unsecured Creditors (the “Committee”) 

filed a preliminary objection (ECF No. 2586, the “Preliminary Objection”) to the Motion. The 

Committee suggests in the Preliminary Objection that the Committee may at some point attempt 

to allege that the PBA Bonds may not have been issued in compliance with Puerto Rico’s 

constitutional debt limit, and that the Committee may further allege at some point that the PBA 

Bonds are therefore invalid. See Preliminary Objection ¶ 5. The Committee has requested that, 

in the event the Court does not dispose of the Motion on other grounds, the Court should “defer 

consideration of the Motion until the underlying issues in connection with the validity of the 

PBA Bonds and the [PBA Leases] have been resolved.” Preliminary Objection ¶ 31. 

The Preliminary Objection makes no substantive arguments and presents no evidence that 

could support a theory that the PBA Bonds are subject to the constitutional debt limit, and the 

Committee itself acknowledges that the debt limit issue is not ripe for adjudication. Therefore, 

there is no basis for the Court to address the debt limit issue in connection with the pending 

Motion. 

However, in the event the Committee or another party were to attempt to challenge the 

validity of the PBA Bonds at some point in the future, whether in connection with the Motion or 

otherwise, Assured reserves its right to be heard in connection with any such challenge to the 

validity of the PBA Bonds and in connection with any other issues related to the application of 

the debt limit. 

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Dated: San Juan, Puerto Rico 

 March 5, 2018 

CASELLAS ALCOVER & BURGOS P.S.C. 

By: /s/ Heriberto Burgos Pérez 

Heriberto Burgos Pérez 

USDC-PR 204809 

Ricardo F. Casellas-Sánchez 

USDC-PR 203114 

Diana Pérez-Seda 

USDC-PR 232014 

P.O. Box 364924 

San Juan, PR 00936-4924 

Telephone: (787) 756-1400 

Facsimile: (787) 756-1401 

Email: hburgos@cabprlaw.com 

 rcasellas@cabprlaw.com 

 dperez@cabprlaw.com 

Attorneys for Assured Guaranty Corp. and 

Assured Guaranty Municipal Corp. 

CADWALADER, WICKERSHAM & TAFT LLP 

By: /s/ Mark C. Ellenberg 

Howard R. Hawkins, Jr.* 

Mark C. Ellenberg* 

Ellen M. Halstead* 

Thomas J. Curtin* 

Casey J. Servais* 

200 Liberty Street 

New York, NY 10281 

Telephone: (212) 504-6000 

Facsimile: (212) 406-6666 

Email: howard.hawkins@cwt.com 

mark.ellenberg@cwt.com 

ellen.halstead@cwt.com 

thomas.curtin@cwt.com 

casey.servais@cwt.com 

* Admitted pro hac vice

Attorneys for Assured Guaranty Corp. and 

Assured Guaranty Municipal Corp. 

 

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CERTIFICATE OF SERVICE 

I hereby certify that I filed this document electronically with the Clerk of the Court using 

the CM/ECF System, which will send notification of such filing to all parties of record in the 

captioned case. Further, I directed that the following counsel of record to be served by U.S. 

Mail: 

Office of the United States Trustee for Region 21

Edificio Ochoa 

500 Tanca Street, Suite 301 

San Juan, PR 00901-1922 

Gerardo J. Portela Franco 

Puerto Rico Fiscal Agency and Financial 

Advisory Authority (AAFAF) 

De Diego Ave. Stop 22 

San Juan, Puerto Rico 00907 

John J. Rapisardi, Esq. 

O’Melveny & Myers LLP 

7 Times Square 

New York, New York 10036 

Andrés W. López, Esq. 

Law Offices of Andrés W. López 

902 Fernández Juncos Ave. 

San Juan, PR 00907 

Martin J. Bienenstock, Esq. 

Proskauer Rose LLP 

Eleven Times Square 

New York, New York 10036-8299 

Hermann D. Bauer, Esq. 

O’Neill & Borges LLC 

250 Muñoz Rivera Ave., Suite 800 

San Juan, PR 00918-1813 

Nancy A. Mitchell, Esq. 

Greenberg Traurig LLP 

200 Park Avenue 

New York, New York 10166 

Arturo Diaz-Angueira, Esq. 

Cancio, Nadal, Rivera & Diaz, P.S.C. 

403 Muñoz Rivera Ave. 

San Juan (Hato Rey), PR 00918-3345 

Luc A. Despins, Esq. 

Paul Hastings LLP 

200 Park Avenue 

New York, New York 10166 

Juan. J. Casillas Ayala 

Casillas, Santiago & Torres LLC 

El Caribe Office Building 

53 Palmeras Street, Suite 1601 

San Juan, PR 00901-2419 

Robert Gordon, Esq. 

Jenner & Block LLP 

919 Third Avenue 

New York, New York 10022 

A.J. Bennazar-Zequeira 

Bennazar, Garcia & Milian, C.S.P. 

Edificio Union Plaza PH-A piso 18 Avenida 

Ponce de Leon #416 

Hato Rey, PR 00918 

At San Juan, Puerto Rico, this fifth day of March, 2018. 

By: /s/ Heriberto Burgos Pérez 

Heriberto Burgos Pérez 

USDC-PR 204809 

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