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)

In re:

THE FINANCIAL OVERSIGHT AND 

MANAGEMENT BOARD FOR PUERTO RICO,

as representative of

PUERTO RICO ELECTRIC POWER AUTHORITY,

Debtor.

PROMESA

Title III 

No. 17 BK 4780-LTS

Re: Dkt. Nos. 881, 882

This Opposition Relates Only to 

PREPA and Shall be Filed in Both 

the Lead Case No. 17 BK-3283-LTS 

and in PREPA’s Title III Case No. 

17-BK-4780-LTS

OPPOSITION TO MOTION FOR ALLOWANCE 

OF ADMINISTRATIVE EXPENSE CLAIMS FILED BY 

LORD ELECTRIC COMPANY OF PUERTO RICO, INC.

The Puerto Rico Fiscal Agency and Financial Advisory Authority (“AAFAF”), on behalf of 

the Puerto Rico Electric Power Authority (“PREPA”) pursuant to the authority granted to it under 

the Enabling Act of the Fiscal Agency and Financial Advisory Authority, Act 2-2017, opposes the 

Motion for Allowance of Administrative Expense Claims[Dkt. No. 881] (the “Motion”) filed by Lord 

 

1 The Debtors in the jointly-administered 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 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) 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); (iv) Puerto Rico Highways and Transportation Authority (“HTA”) 

(Bankruptcy Case No. 17 BK 3567-LTS) (Last Four Digits of Federal Tax ID: 3808); 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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Electric Company of Puerto Rico, Inc. (“Lord Electric”).2 In support of the opposition, AAFAF 

respectfully states as follows: 

1. In the Motion, Lord Electric requests that the Court allow as a post-petition 

administrative expense claim the amount of $1,091,860.96 (the “Claim”). (Mot. ¶ 1.) Lord Electric 

asserts that the Claim arose through its work from September through December 2017 on restoration 

efforts and repair of transmission lines to the power grid post Hurricane Maria. (Id. ¶ 6.)

2. AAFAF has offered Lord Electric to treat the Claim as an administrative expense and 

has informed Lord Electric that the Claim will be paid either with funds provided by the Federal 

Emergency Management Agency (“FEMA”) when they become obligated or by PREPA at the time 

a plan of adjustment is confirmed.3 Lord Electric, however, demands immediate payment.

3. To the extent Lord Electric is seeking immediate payment of its Claim in the Motion, 

such request must be denied. 

4. First, subject to limited exceptions and none of which applies to Lord Electric, 

Section 4-13 of the Superpriority Post-Petition Revolving Credit Loan Agreement between Puerto 

Rico Electric Power Authority as the Borrower and the Commonwealth of Puerto Rico as the Lender

[Dkt. No. 729-3] (the “Post-Petition Credit Agreement”) precludes PREPA from paying emergency 

related expenses such as Lord Electric’s Claim.4 

 

2 The Financial Oversight and Management Board for Puerto Rico (the “Oversight Board”), as the Debtors’ 

representative pursuant to section 315(b) of the Puerto Rico Oversight, Management, and Economic Stability Act

(“PROMESA”), 48 U.S.C. §§ 2101-2241, has authorized AAFAF to file this opposition on behalf of PREPA.

3 PREPA reserves all rights, defenses, and objections with respect to the amount of the Claim allowed as an 

administrative expense under 11 U.S.C. § 503(b). 

4 Section 4-13 of the Post-Petition Credit Agreement, in pertinent part, states that “the proceeds of the Revolving 

Credit Loans shall not be used for . . . repair or restoration of damaged public facilities” and that “any payment of any 

Emergency Spend (as defined in the Budget) shall be limited to those specific expenses (a) from which Borrower has 

received FEMA Reimbursement (as defined in the Budget) or FEMA has obligated funds or (b) to parties that are 

currently providing goods and services.” 

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5. Second, if the Claim is characterized as an administrative expense as Lord Electric 

asserts, PREPA may delay payment of the Claim until a plan of adjustment is confirmed under 

PROMESA. See 11 U.S.C. § 2174; PROMESA § 314(b)(4) (“The court shall confirm the plan if . . 

. the plan provides that on the effective date of the plan each holder of a claim of a kind specified in 

507(a)(2) of title 11, United States Code, will receive on account of such claim cash equal to the 

allowed amount of such claim[.]”). Indeed, courts generally postpone actual payment of 

administrative expense claims until confirmation of a plan. See, e.g., In re Budget Uniform, Inc., 71 

Bankr. 652, 654 (Bankr. E.D. Pa. 1987) (administrative claims “must wait for confirmation of a plan 

before becoming entitled to payment”); In re Continental Airlines, 146 B.R. 520, 531 (Bankr. D. 

Del. 1992) (“Most courts postpone actual payment [of administrative claims] until confirmation of 

a plan.”) (citations omitted); In re Global Home Prods., LLC, 2006 Bankr. LEXIS 3608, at *15-16 

(Bankr. D. Del. Dec. 21, 2006) (denying immediate payment of administrative claim).

6. Third, to the extent Lord Electric contends it is entitled to payment immediately from 

PREPA because it has a direct claim against PREPA under the laws of Puerto Rico, the automatic 

stay under PROMESA applies to stay “any act to obtain possession of property of the estate or of 

property from the estate or to exercise control over property of the estate[.]” 11 U.S.C. § 362(a)(3).5

For the reasons set forth above, AAFAF respectfully requests that the Court deny the Motion, 

and in the alternative, that the Court allow Lord Electric’s Claim as an administrative expense claim 

and that the payment of the Claim shall be delayed until a plan of adjustment has been confirmed.

Dated: July 13, 2018 Respectfully submitted,

San Juan, Puerto Rico

THE PUERTO RICO FISCAL AGENCY

AND FINANCIAL ADVISORY

 

5 PROMESA § 301(a) incorporates 11 U.S.C. § 362. See 11 U.S.C. § 2161.

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AUTHORITY, as Fiscal Agent for PREPA

By its attorneys,

/s/ Kevin D. Finger

Kevin D. Finger (admitted pro hac vice)

David D. Cleary (admitted pro hac vice)

Greenberg Traurig, LLP

77 West Wacker Drive Suite 3100

Chicago, IL 60601

Phone: 312.456.8400

Fax: 312.456.8435

Email: fingerk@gtlaw.com

 clearyd@gtlaw.com

Nathan A. Haynes (admitted pro hac vice)

Greenberg Traurig, LLP

200 Park Avenue

New York, NY 10166

Phone: 212.801.9200

Fax: 212.801.6400

 Email: haynesn@gtlaw.com

 

 Joseph P. Davis III (admitted pro hac vice)

 Greenberg Traurig, LLP

 One International Place, Suite 2000

 Boston, MA 02110

 Phone: 617.310.6000

 Fax: 617.310.6001

 Email: davisjo@gtlaw.com

THE PUERTO RICO ELECTRIC 

POWER AUTHORITY

By its attorneys,

/s/ Arturo Díaz Angueria

USDC No. 117907

/s/ Katiuska Bolaños Lugo

USDC No. 231812

CANCIO, NADAL, RIVERA & DÍAZ, P.S.C.

PO Box 364966

San Juan, PR 00936-4966

Phone: (787) 767-9625

Fax: (787) 764-4430

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Email: adiaz@cnrd.com

 kbolanos@cnrd.com

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