180430 ORDER RE WIDE RANGE STAY RELIEF VERSION APRIL 30, 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, 

as representative of No. 17 BK 3283-LTS 

THE COMMONWEALTH OF PUERTO RICO, (Jointly Administered) 

et al., 

 Debtors.1

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

In re: PROMESA 

 Title III 

THE FINANCIAL OVERSIGHT AND 

MANAGEMENT BOARD FOR PUERTO RICO, 

as representative of No. 17 BK 4780-LTS 

This order relates to 

PREPA and shall be filed in 

the lead Case No. 17 BK 

3283-LTS and Case No. 17 

BK 4780-LTS 

PUERTO RICO ELECTRIC POWER 

AUTHORITY, 

 Debtor. 

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

MEMORANDUM ORDER DENYING WIDE RANGE CORPORATION’S

MOTION FOR RELIEF FROM STAY (DOCKET ENTRY NO. 2852) 

 

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).

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180430 ORDER RE WIDE RANGE STAY RELIEF VERSION APRIL 30, 2018 2 

Before the Court is a motion filed by Wide Range Corporation (the “Movant”) for 

relief from the automatic stay imposed by the filing of the above-captioned Title III case on a 

breach of contract lawsuit regarding the imposition of delay penalties in connection with two 

purchase orders, commenced in the Court of First Instance in San Juan, Puerto Rico, captioned 

Wide Range Corporation v. Autoridad de Energía Eléctrica, Civil Case # K AC2016-1247 (806) 

(the “Lawsuit”), by Movant against the Puerto Rico Electric Power Authority (“PREPA” or the 

“Debtor”). For the following reasons, the Motion is denied. 

BACKGROUND

Movant, the named Plaintiff in the Lawsuit, seeks to continue to prosecute the 

Lawsuit through entry but not execution of judgment. (Case No. 17-3283, Docket Entry No. 

2852, Motion for Relief of Stay (the “Motion”), ¶¶ 3, 9.) In the Lawsuit, Movant seeks 

reimbursement of $500,000 in delay penalties and related relief. (Id. ¶ 5, 6.) As to the status of 

the case prior to imposition of the stay, Movant asserts that “the pending depositions were the 

only pending discovery,” PREPA had a deadline to oppose Movant’s summary judgment motion, 

and pre-trial and settlement conferences had been scheduled. (Id. ¶ 17.) Movant further asserts 

that relief from the automatic stay is appropriate for the following reasons: (i) depositions were 

the only pending discovery, (ii) continuation of the Lawsuit would not interfere with PREPA’s 

Title III case, and (iii) continuation of the Lawsuit will permit Movant to resolve the 

quantification of PREPA’s liability to Movant. (Id.) Movant further asserts that its commercial 

reputation will be harmed because PREPA’s records will show that Movant did not fulfill its 

purchase orders in a timely fashion. (Id. ¶ 18; Movant’s Reply, ¶ 6.) On April 20, 2018, PREPA 

filed its objection (the “Debtor’s Objection”) to the Motion. (Case No. 17-3283, Docket Entry 

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180430 ORDER RE WIDE RANGE STAY RELIEF VERSION APRIL 30, 2018 3 

No. 2934; Case No. 17-4780, Docket Entry No. 804.) On April 27, 2018, Movant filed a reply to 

the Debtor’s Objection (the “Movant’s Reply”). (Case No. 17-3283, Docket Entry No. 2970.) 

The Court has reviewed the submissions thoroughly. 

The Debtor argues that the Motion must be denied for several reasons, including 

interference with the “breathing space” needed by the Debtor to rebuild PREPA’s infrastructure 

and restore power to the people of the Commonwealth which is essential to PREPA’s Title III 

case. The Debtor further cites burdens on Debtor resources that would be occasioned by 

resumption of the litigation of the Lawsuit. Specifically, the Debtor disputes Movant’s 

assertions that written discovery was almost complete and depositions were about to begin prior 

to the Title III filing. The Debtor argues that it must gather records to answer interrogatories, 

respond to document production requests, cover depositions of numerous current and former 

employees and respond to Movant’s summary judgment papers, all of which would divert the 

already strained and limited resources of the Debtor, its management and its representatives. 

DISCUSSION

Section 362(a) of the Bankruptcy Code, made applicable by Section 301(a) of 

PROMESA, 48 U.S.C. § 2161, imposes an automatic stay on “the commencement or 

continuation . . . of a judicial, administrative, or other action or proceeding against the debtor that 

was or could have been commenced before the commencement of the case under this title . . . .” 

11 U.S.C. § 362(a)(1); see also PROMESA § 301(a) (incorporating 11 U.S.C. § 362 into Title III 

cases). Section 362(d)(1) of Title 11 of the United States Code, made applicable in these 

proceedings by Section 301 of PROMESA, 48 U.S.C. § 2161, permits a court to grant relief from 

the automatic stay “for cause.” To determine whether cause exists to lift the bankruptcy stay, 

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180430 ORDER RE WIDE RANGE STAY RELIEF VERSION APRIL 30, 2018 4 

courts in this district rely on the factors first enumerated by the United States Court of Appeals 

for the Second Circuit in In re Sonnax Indus., Inc., 907 F.2d 1280, 1286 (2d Cir. 1990) 

(“Sonnax”). See, e,g., Brigade Leveraged Capital Structures Fund Ltd. v. Garcia-Padilla, 217 F. 

Supp. 3d 508, 518 (D.P.R. 2016) (citing Sonnax). Of particular relevance to the instant case are 

the following factors identified by the Sonnax Court: “whether relief would result in a partial or 

complete resolution of the issues,” “lack of any connection with or interference with the 

bankruptcy case,” “the interests of judicial economy and the expeditious and economical 

resolution of litigation,” “whether litigation in another forum would prejudice the interests of 

other creditors,” and the “impact of the stay on the parties and the balance of harms.” Sonnax, 

907 F.2d at 1286. 

The Sonnax criteria do not weigh in Movant’s favor with respect to the 

continuation of the Lawsuit. Continuation of the Lawsuit, in which neither discovery nor 

dispositive motion practice has been completed, would not necessarily result in an expeditious 

resolution of Movant’s claims. Thus, the requested relief from the automatic stay would not 

result in a complete or materially significant partial resolution of Movant’s claims against 

PREPA. Nor would the requested relief advance in any material way the progress of PREPA’s 

PROMESA Title III debt adjustment proceedings. Moreover, Movant’s liability claim and any 

attendant factual and equitable issues relevant to relief can be adjudicated within the context of 

this Title III proceeding. For the same reasons, relief from stay to continue the Lawsuit would 

not serve the interests of judicial economy or the economical resolution of Movant’s dispute with 

PREPA. Furthermore, the continuation of the Lawsuit would prejudice PREPA at a time when 

its resources are constrained by requiring the expenditure of PREPA’s already depleted resources 

(both financial and personnel) and diverting attention from the reconstruction of PREPA’s 

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180430 ORDER RE WIDE RANGE STAY RELIEF VERSION APRIL 30, 2018 5 

electrical grid and future planning. The hardship to PREPA of devoting its legal and 

management resources to litigation of liability and penalties in connection with past purchase 

orders at a time when it must focus on the restoration and strengthening of the power 

infrastructure for the vast majority of Puerto Rico’s residents and businesses outweighs the 

burden on Movant the pendency of the controversy regarding timeliness of its performance, and 

of delay of resolution of its financial claim, a burden which is shared with other creditors. The 

Motion is, accordingly, denied. 

CONCLUSION

For the foregoing reasons, Movant’s motion is denied and the automatic stay of 

the Lawsuit continues in place. See 11 U.S.C. § 362(a). This Memorandum Order resolves 

docket entry no. 2852 in case no. 17-3283. 

In light of Movant’s expressed concerns regarding the potential impact on its 

commercial prospects of the unresolved controversy as to whether there was a factual basis for 

the delay penalties, the Court encourages the parties to meet and confer promptly to seek to 

develop a mutually acceptable statement regarding the nature and pendency of the stayed 

litigation that can be used in connection with reference inquiries as Movant bids for business. 

The parties must file a joint status report concerning their efforts by June 4, 2018. 

SO ORDERED. 

Dated: April 30, 2018 

 /s/ Laura Taylor Swain 

 LAURA TAYLOR SWAIN

 United States District Judge 

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