Hearing Date: March 7, 2018 at 9:30 a.m. (AST)

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 THE AD HOC GROUP OF GENERAL OBLIGATION 

BONDHOLDERS AS TO MOTION OF 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 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 04780-LTS) (Last Four Digits of 

Federal Tax ID: 3747) (Title III case numbers are listed as Bankruptcy Case numbers due to 

software limitations). 

Case:17-03283-LTS Doc#:2651 Filed:03/02/18 Entered:03/02/18 15:49:10 Desc: Main

Document Page 1 of 4
The Ad Hoc Group of General Obligation Bondholders (the “GO Group”) respectfully 

submits this Reservation of Rights as to the PBA Funds’ Motion for the Payment of Rent (Dkt. 

2492, the “Rent Motion”).2 In support of its Reservation of Rights, the GO Group states as 

follows: 

1. The Rent Motion seeks to compel the Debtors to satisfy all post-petition rental 

obligations arising under leases between the Puerto Rico Public Buildings Authority (the “PBA”) 

and the Debtors. See Rent Motion ¶ 27. In its objection to the Rent Motion, the Oversight 

Board primarily contends that the PBA Funds, as holders of bonds issued by the PBA, lack 

standing to enforce the terms of the PBA’s leases with the Debtors. See Dkt. 2587 (the “Board 

Objection”) ¶¶ 14-31. 

2. The Oversight Board also glancingly suggests that, based on a “preliminary 

review,” the PBA’s leases with the Debtors may be more appropriately characterized as 

financing transactions, rather than true leases. Board Objection ¶ 32. Thus, the Board contends, 

the Court should not grant the relief requested by the PBA Funds until it determines that all of 

the leases on which the PBA Funds seek to compel payment are in fact true leases. See id. ¶ 33. 

In its objection, the Official Committee of Unsecured Creditors (the “UCC”) echoes the Board’s 

contention regarding recharacterization of the PBA leases. See Dkt. 2586 (the “UCC 

Objection”) ¶¶ 19-24. The UCC also questions the validity of bonds issued by the PBA, on the 

theory that those bonds are, in substance, debts of the Commonwealth that should have been 

included in the calculation of the Commonwealth’s constitutional debt limit. See id. ¶¶ 28-29. 

 2

 The GO Group submits this Reservation of Rights exclusively on its own behalf and does 

not assume any fiduciary or other duties to any other creditor or person. 

Case:17-03283-LTS Doc#:2651 Filed:03/02/18 Entered:03/02/18 15:49:10 Desc: Main

Document Page 2 of 4
2 

3. As the Oversight Board and UCC appear to acknowledge, the recharacterization 

and validity arguments floated in the Board Objection and the UCC Objection rest on contested 

factual issues that could be resolved only with a full evidentiary record. Indeed, the Board points 

to the possibility of rechacterization as a reason for the Court to withhold relief pending further 

proceedings, rather than as a reason to deny the Rent Motion altogether. See Board Objection 

¶ 33. The UCC likewise couches its validity argument in the same way. See UCC Objection 

¶ 28. It therefore follows that any resolution of the recharacterization and validity questions 

would be premature at this stage. 

4. Although the GO Group does not take any position with respect to the Rent 

Motion at this time, the GO Group reserves the right to be heard on the issues raised by the 

Board Objection and the UCC Objection in the event that the Court determines that resolution of 

those issues is necessary to dispose of the Rent Motion or in the event that those issues are later 

presented in another procedural context. 

[The remainder of this page is intentionally left blank.] 

Case:17-03283-LTS Doc#:2651 Filed:03/02/18 Entered:03/02/18 15:49:10 Desc: Main

Document Page 3 of 4
3 

Dated: March 2, 2018 

/s/ Ramón Rivera Morales 

J. Ramón Rivera Morales 

USDC-PR Bar No. 200701 

JIMÉNEZ, GRAFFAM & LAUSELL

P.O. Box 366104 

San Juan, PR 00936 

Telephone: (787) 767-1030 

Facsimile: (787) 751-4068 

Email: rrivera@jgl.com 

Respectfully submitted, 

/s/ Mark T. Stancil 

Lawrence S. Robbins (admitted pro hac vice) 

Gary A. Orseck (admitted pro hac vice) 

Kathryn S. Zecca admitted pro hac vice) 

Mark T. Stancil (admitted pro hac vice) 

Ariel N. Lavinbuk (admitted pro hac vice) 

Donald Burke (admitted pro hac vice) 

ROBBINS, RUSSELL, ENGLERT, ORSECK,

UNTEREINER & SAUBER LLP 

1801 K Street, N.W., Suite 411-L 

Washington, DC 20006 

Telephone: (202) 775-4500 

Facsimile: (202) 775-4510 

Email: mstancil@robbinsrussell.com 

/s/ Andrew N. Rosenberg 

Andrew N. Rosenberg (admitted pro hac vice) 

Richard A. Rosen (admitted pro hac vice) 

Walter Rieman (admitted pro hac vice) 

Kyle J. Kimpler (admitted pro hac vice) 

Karen R. Zeituni (admitted pro hac vice) 

PAUL, WEISS, RIFKIND, WHARTON 

& GARRISON LLP 

1285 Avenue of the Americas 

New York, NY 10019 

Telephone: (212) 373-3000 

Facsimile: (212) 757-3990 

Email: arosenberg@paulweiss.com 

Counsel to the Ad Hoc Group of General Obligation Bondholders 

Case:17-03283-LTS Doc#:2651 Filed:03/02/18 Entered:03/02/18 15:49:10 Desc: Main

Document Page 4 of 4