180529 ORD DENYING MERCADO JIMÉNEZ MOTS VERSION MAY 29, 2018 1

UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF PUERTO RICO

----------------------------------------------------------x

In re: PROMESA

Title III

THE FINANCIAL OVERSIGHT AND

MANAGEMENT BOARD FOR PUERTO RICO, No. 17 BK 3283-LTS

(Jointly Administered)

as representative of

This Order relates to 

THE COMMONWEALTH OF PUERTO RICO, 17 BK 3567-LTS and shall

et al., be filed in the Lead Case No.

17 BK 3283-LTS and Case

Debtors.1 No. 17 BK 3567-LTS

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ORDER DENYING RELIEF SOUGHT IN NOTICE OF COMPLIANCE 

AND PETITION FOR PAYMENT OF FUNDS (DOCKET ENTRY NO. 345) AND 

MOTION INFORMING STATUS OF CASE AND REQUEST OF ORDER (DOCKET ENTRY NO. 406)

On May 2, 2018, the Court entered an order directing Adrián Mercado Jiménez 

(“Movant”) and the Puerto Rico Fiscal Agency and Financial Advisory Authority (“AAFAF,” 

and together with Movant, the “Parties”) to meet and confer and provide the Court with a joint 

status report in connection with certain pending Motions (as defined below). (Docket Entry No. 

434, the “Prior Order”.)2

 On May 21, 2018, the Court received and reviewed the joint status 

 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 (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).

2 All docket entry references are to entries in case no. 17-BK3567, unless otherwise 

specified.

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180529 ORD DENYING MERCADO JIMÉNEZ MOTS VERSION MAY 29, 2018 2

report filed by the Parties. (Docket Entry No. 440, the “Joint Report”.) For the foregoing 

reasons, the Motions are denied. 

DISCUSSION

On December 7, 2017, Movant filed a Notice of Compliance and Petition for 

Payment of Funds (Docket Entry No. 345, the “Payment Motion”) seeking payment of $16,448 

(the “Settlement Amount”) from HTA in connection with a prepetition agreement purportedly 

settling an eminent domain action captioned Autoridad de Carreteras y Transportación de Puerto 

Rico v. Sucn. de Luis Alberto Mercado Jiménez et al., Case No. K EF2011-0240 (the 

“Lawsuit”). On February 5, 2018, the Parties entered into a stipulation modifying the automatic 

stay “to the limited extent necessary to allow HTA to pay Movant the Settlement Amount . . . .” 

(Docket Entry No. 433-1, the “Lift Stay Stipulation.”) HTA deposited the Settlement Amount 

with the eminent domain state court (the “State Court”). On February 27, 2018, Movant filed a 

Motion Informing Status of Case and Request of Order (Docket Entry No. 406, the “Informal 

Motion”, together with the Payment Motion, the “Motions”) requesting that the Court direct 

HTA to pay the Settlement Amount directly to Movant. HTA contends that the Settlement 

Amount must remain consigned in the State Court because it is the only court with jurisdiction to 

enter a final judgment authorizing the transfer of title to the real property that is at issue in the 

eminent domain proceeding from Movant to HTA. (Joint Report at 5.) While the State Court 

appears to have returned the Settlement Amount to HTA, HTA states that it intends to seek 

reconsideration of that decision and State Court approval of the settlement of the Lawsuit.

The Court has reviewed the Parties’ submissions carefully. The Motions are 

hereby denied. The Lift Stay Stipulation provides that the automatic stay is modified to “allow 

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180529 ORD DENYING MERCADO JIMÉNEZ MOTS VERSION MAY 29, 2018 3

HTA to pay Movant the Settlement Amount.” It does not specify all of the terms of the 

settlement, nor does it affirmatively direct HTA to make payment under particular conditions or 

in a particular manner. HTA represents here that State Court approval is required to complete 

the settlement and resolve the eminent domain proceeding. This Court makes no findings and 

expresses no opinion as to the terms and effect of the prepetition settlement agreement, pursuant

to which the Settlement Amount is purportedly to be paid. Any controversy as to what is 

required to resolve the Lawsuit should be taken up with the State Court. 

The automatic stay imposed by the filing of HTA’s Title III case remains lifted to 

permit the resolution in the State Court of any disputes as to what is required to “allow HTA to 

pay Movant the Settlement Amount.” This order resolves docket entry nos. 345 and 406 in Case 

No. 17-3567.

SO ORDERED.

Dated: May 29, 2018

 /s/ Laura Taylor Swain 

LAURA TAYLOR SWAIN

United States District Judge

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