Hearing Date: June 28, 2017 at 9:30 a.m. (Prevailing Eastern Time)

UNITED STATES DISTRICT COURT

DISTRICT OF PUERTO RICO

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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 03283-LTS

(Jointly Administered)

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RESPONSE AND RESERVATION OF RIGHTS OF INTERNATIONAL UNION,

UNITED AUTOMOBILE, AEROSPACE AND AGRICULTURAL IMPLEMENT

WORKERS OF AMERICA (UAW), SERVICE EMPLOYEES INTERNATIONAL

UNION, AND AMERICAN FEDERATION OF STATE, COUNTY & MUNICIPAL

EMPLOYEES TO DEBTORS’ MOTION FOR AN ORDER APPROVING PROCEDURE

TO RESOLVE COMMONWEALTH-COFINA DISPUTE [DOCKET ENTRY NO. 303]

The International Union, United Automobile, Aerospace and Agricultural

Implement Workers of America (UAW) (“UAW”), Service Employees International Union

(“SEIU”), and American Federation of State, County & Municipal Employees (“AFSCME”)

(together, “the Unions”) submit this Response and Reservation of Rights in response to the June

10, 2017 motion (“Motion”) [Docket Entry No. 301] of the Debtors For Order Approving

Procedure to Resolve Commonwealth-COFINA Dispute.

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

(Bankruptcy Case No. 17 BK 3283-LTS) (Last Four Digits of Federal Tax ID: 3481); and (ii)

Puerto Rico Sales Tax Financing Corporation (“COFINA”) (Bankruptcy Case No. 17 BK 3284)

(Last Four Digits of Federal Tax ID: 8474).

00851113.4

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RESERVATION OF RIGHTS

1. The Unions do not object to the Motion’s request for a procedure through

which an appointed Commonwealth Agent and COFINA Agent cooperate to commence litigation

to resolve the Commonwealth-COFINA Dispute.2See Motion ¶38. But the Unions reserve their

right to intervene and participate in any litigation or alternative dispute resolution proceeding

initiated either by the Debtors or the Commonwealth and COFINA Agents as their representatives.

Or should this Court determine that one of the alternative mechanisms for resolving this “gating”

issue is appropriate -- such as the interpleader complaint filed by the Bank of New York Mellon

(Adv. Proc. No. 17-133-LTS), or the request by certain COFINA bondholders for resolution of the

issue by the Puerto Rico Supreme Court (Docket Entry No. 270) -- the Unions likewise reserve

these same rights with respect to any other mechanisms.

2. Specifically, the Unions’ reservation of right includes (but is not limited to)

the right to advance the position that the COFINA debt was issued in violation of the Puerto Rico

Constitution, that sales tax revenues were improperly transferred to COFINA and pledged to the

COFINA bondholders, and that any liens allegedly created by the COFINA structure were not

special revenue bonds, were extinguished by the filing of the petitions in these Title III cases, or

are otherwise, at best, unsecured. While some of these arguments have been pressed by certain

general obligation (GO) bondholders of the Commonwealth, not all have, and it bears mention that

the Unions and their members hold, like the GO bondholders, significant claims whose treatment

in these cases will be directly affected by resolution of the COFINA issue and whose priority under

federal bankruptcy law is at least on par with the GO bondholders.

2 For purposes of this Response and Reservation of Rights only, the Unions adopt the

definitions of “Commonwealth Agent,” “COFINA Agent,” and “Commonwealth-COFINA

Dispute” as defined in the Motion. See Motion ¶¶17, 38(a)-(d).

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3. Furthermore, while the Unions do not object to the procedure proposed in

the Motion, the Unions ask that the Court await the input of the Official Committee of Unsecured

Creditors and the Official Committee of Retirees (together, “Committees”) before ruling on the

Motion because the resolution of the Commonwealth-COFINA Dispute will have a significant

impact on the Debtors’ plan of adjustment. The Unions note in this regard that the Official

Committee of Unsecured Creditors may serve as Agent of the Commonwealth under the proposed

process. On June 15, 2017, the United States Trustee for Region 21 formally appointed the

Committees. SEIU is a member of the Official Committee of Unsecured Creditors, and the

President of AFSCME’s Retiree Chapter, Blanca Paniagua, is a member of the Official Committee

of Retirees. Accordingly, in light of the significance of the issue presented and its impact on all

creditors of the Commonwealth, the motion should not be decided until the Committees have

convened, selected counsel, and been provided an opportunity to respond.

CONCLUSION

The Court should permit the Committees to be heard before ruling on the Motion.

The Unions reserve their rights as stated herein.

Dated: June 16, 2017

Respectfully submitted,

/s/ Peter D. DeChiara

Richard M. Seltzer (pro hac vice motion pending)

Thomas N. Ciantra

Peter D. DeChiara

Hiram M. Arnaud

COHEN, WEISS AND SIMON LLP

330 West 42nd Street

New York, New York 10036-6976

Tel.: (212) 563-4100

Fax: (646) 473-8216

tciantra@cwsny.com

pdechiara@cwsny.com

harnaud@cwsny.com

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/s/ Miguel Simonet Sierra

Miguel Simonet Sierra

USDC # 210101

MONSERRATE SIMONET & GIERBOLINI

101 San Patricio Avenue, Suite 1120

Guaynabo, PR 00968

Tel.: (787) 620-5300

Fax: (787) 620-5305

msimonet@msglawpr.com

Attorneys for International Union, United

Automobile, Aerospace and Agricultural Implement

Workers of America (UAW) and Service Employees

International Union

/s/ Sharon L. Levine

SAUL EWING LLP

Sharon L. Levine

Dipesh Patel

1037 Raymond Blvd., Suite 1520

Newark, NJ 07102

(973) 286-6713 (Telephone)

(973) 286-6821 (Facsimile)

slevine@saul.com

dpatel@saul.com

/s/ Manuel A. Rodriguez Banchs

P.O. Box 368006

San Juan, Puerto Rico 00936-8006

(787) 764-8896 (Telephone)

(787) 721-0975 (Facsimile)

manuel@rodriguezbanchs.com

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/s/ Matthew S. Blumin

AMERICAN FEDERATION OF STATE,

COUNTY AND MUNICIPAL EMPLOYEES

Judith Rivlin

Teague P. Paterson

Matthew S. Blumin

1101 17th Street NW, Suite 900

Washington, DC 20011

(202) 775-5900 (Telephone)

(202) 452-0556 (Facsimile)

jrivlin@afscme.org

tpaterson@afscme.org

mblumin@afscme.org

Attorneys for the American Federation of State,

County and Municipal Employees

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CERTIFICATE OF SERVICE

I HEREBY CERTIFY that on this 16th day of June, 2017, I have filed a true and exact

copy of the foregoing with the Clerk of the Court using the CM/ECF System which will notify

all counsel of record and caused to be mailed or emailed a copy, as provided in the Courtapproved Case Management Procedures in this case.

Dated: June 16, 2017 /s Hiram M. Arnaud

HIRAM M. ARNAUD

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