Hearing Date: July 25, 2018 at 9:30 a.m. (AST) 

Objection Date: July 10, 2018 at 4:00 p.m. (AST) 

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UNITED STATES DISTRICT COURT 

FOR THE DISTRICT OF PUERTO RICO 

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 : 

In re: : 

 : 

THE FINANCIAL OVERSIGHT AND : PROMESA 

MANAGEMENT BOARD FOR PUERTO RICO, : Title III 

 : 

 as representative of : Case No. 17-BK-3283 (LTS) 

 : 

THE COMMONWEALTH OF PUERTO RICO et al., : (Jointly Administered) 

 : 

Debtors.1

 : 

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CREDITORS’ COMMITTEE’S INFORMATIVE MOTION REGARDING RENEWED 

RULE 2004 MOTION AND DISCOVERY ITEMS TO BE ADDRESSED AT JULY 25, 

2018 OMNIBUS HEARING 

 

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 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), (ii) 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), (iii) Puerto Rico Highways and Transportation Authority (“HTA”) (Bankruptcy Case No. 17-BK3567 (LTS)) (Last Four Digits of Federal Tax ID: 3808), and (iv) Puerto Rico Sales Tax Financing Corporation 

(“COFINA”) (Bankruptcy Case No. 17-BK-3284 (LTS)) (Last Four Digits of Federal Tax ID: 8474); and (v) 

Puerto Rico Electric Power Authority (“PREPA”) (Bankruptcy Case No. 17 BK 4780-LTS) (Last Four Digits of 

Federal Tax ID: 3747). 

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To the Honorable United States Magistrate Judge Judith G. Dein: 

The Official Committee of Unsecured Creditors of all title III debtors (other than 

COFINA) (the “Committee”) hereby submits this Informative Motion Regarding Renewed Rule 

2004 Motion and Discovery Items to Be Addressed at July 25, 2018 Omnibus Hearing (the 

“Informative Motion”), outlining the items that, in the Committee’s view, should be addressed at 

the July 25, 2018 Omnibus Hearing as part of the continuation of the court’s consideration of the 

Committee’s Renewed Motion Seeking Entry of Order, Under Bankruptcy Rule 2004, 

Authorizing Discovery With Respect to Certain Causes of Puerto Rico Financial Crisis 

Beginning On August 15, 2018 [Dkt. 3066] (the “Renewed Motion”).1

 The items outlined in 

greater detail below represent discrete categories of materials that (a) may not otherwise be 

addressed as part of the Investigator’s proposed “exit plan” because they may not have been 

requested or received by the Investigator; and (b) should be provided to the Committee before 

the August 15, 2018 publication date of the Investigator’s report in order to allow the Committee 

to evaluate the scope of any remaining discovery efforts that may be necessary. 

Introduction 

1. At the June 6, 2018 hearing on the Committee’s Renewed Motion, the court made 

its views amply clear—the Committee should not be kept in the dark with regard to what 

materials have been produced to the Investigator. As the court explained: 

The overarching thing that I wanted to say is that the Committee is going to get 

these documents. All right? Because I'm not going to end up in a fight about 

 

1

 Because the Renewed Motion has been adjourned to the July 25, 2018 Omnibus Hearing, see June 19, 2018 

Order Regarding Rule 2004 Motion [Dkt. 3317] and remains before the court, this motion has been styled as an 

“informative” motion to ensure that these items are addressed at the Omnibus Hearing. Accordingly, the 

Committee adopts and incorporates all of the arguments made in the briefing on the Renewed Motion. Further, 

capitalized terms used but not otherwise defined in this Renewed Motion have the meanings set forth in the 

Renewed Motion or the Motion of Official Committee of Unsecured Creditors for Order, Under Bankruptcy 

Rule 2004, Authorizing Discovery Program With Respect to Certain Causes of Puerto Rico Financial Crisis 

[Docket No. 706] (the “Rule 2004 Motion”). 

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immediately, not after August 15, 2018, because (a) to the extent such materials were not 

collected by the Investigator to begin with, they will not be addressed in the proposed “exit 

plan”; and (b) these documents are of special importance not just to the Committee’s ability to 

evaluate claims, but to the Committee’s review of the completeness of the Investigator’s final 

report and its determination of whether additional discovery may be warranted. Production of 

these necessary documents was sought almost a year ago in the document requests attached to 

the original Rule 2004 Motion that the Committee filed on July 21, 2017. 

4. Aside from these categories of documents, though, the Committee seeks to ensure 

that another, related issue is addressed at the July 25, 2018 Omnibus Hearing. GDB and the 

Investigator have failed to provide information regarding the general scope of the Investigator’s 

review of GDB documents and the Investigator’s requests for “production” of certain 

documents—effectively blinding the Committee when it comes to the GDB source material 

considered by the Investigator in preparing its report. While the Committee anticipates that its 

concerns with the review of GDB documents will be addressed in its briefing on the 

Investigator’s proposed exit plan, it presents this concern to the court simply to ensure that all 

issues are considered together at the July 25, 2018 Omnibus Hearing, and so that all parties have 

an opportunity to be prepared to address such issues at the July 25, 2018 Omnibus Hearing. 

I. COMMITTEE HAS NO WAY OF KNOWING WHETHER IMPORTANT 

CATEGORIES OF DOCUMENTS HAVE BEEN OR WILL BE PRODUCED 

5. Despite multiple requests, the Investigator has not answered whether it has 

obtained specific categories of materials including, for example: 

 GDB D&O Policies: The Committee has made multiple requests for GDB to 

voluntarily produce copies of any insurance policies for GDB’s current or former 

directors and officers, and each time the GDB has failed to provide these 

policies. Indeed, the Committee has asked the Investigator and GDB whether 

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work. Accordingly, as the court has directed, the Committee cannot be left uninformed as to 

whether documents like these have been received by the Investigator or will be incorporated into 

the Investigator’s final report. 

II. “DAY ONE” DOCUMENTS SHOULD BE PRODUCED TO COMMITTEE 

IMMEDIATELY 

7. Although the Committee is entitled to know as an initial matter whether these 

materials were collected, there is no reason why they cannot also be produced immediately. 

First, to the extent that these documents were not collected by the Investigator, they will not be 

addressed in connection with the proposed “exit plan.”

. Because 

these materials are plainly relevant to the Committee’s efforts, the failure to address them now 

only leads to unnecessary delay, needlessly forcing such discussions to be addressed in 

September or October. 

8. However, even if some of these materials were indeed produced to the 

Investigator and would otherwise be covered in the proposed exit plan, production at this time is 

still warranted. These categories of documents are relevant not only to the Committee’s claims 

identification efforts and its overall investigation, but are of special importance for the question 

of evaluating whether additional discovery is necessary at all. For example, the GDB Board 

materials, including minutes of Board meetings or any subcommittee meetings (e.g., audit, risk, 

or governance committees), will likely outline the specific contours of what was discussed and 

examined (or left unexamined) as part of the Board members’ oversight of GDB’s involvement 

in the issuance of Puerto Rico debt. In that respect, the Board materials will provide a high-level 

“inventory” of the issues considered by GDB and will demonstrate whether there are areas of 

concern that were not reflected in the Investigator’s report that warrant a deeper dive. In fact, the 

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few documents produced by GDB to date highlight the centrality of these Board materials to the 

GDB’s involvement in Puerto Rico’s financial crisis. For example,

 Likewise, as is 

always the case, the D&O policies may help show the value of any potential claims against 

individuals who presently or formerly served at GDB—a question that must always be weighed 

against the costs of pursuing any such claims. As a result, the D&O policies are particularly 

important to inform the Committee’s decision to pursue targeted discovery, including 

depositions, of certain individuals. 

9. Moreover, with regard to the regulator productions, the Committee is aware of at 

least a number of investigations conducted by the SEC and FINRA that pertain to the Puerto 

Rico Financial Institutions’ involvement in the issuance, underwriting, or sale of Puerto Rico 

bonds—including, for example, an extensive SEC investigation into the 2014 issuance of GO 

bonds, and FINRA regulatory actions against certain of the Santander entities for their part in the 

sale of various Puerto Rico bond funds.9

 These productions themselves can inform whether 

certain issues warrant further inquiry, or whether the Investigator’s review was incomplete in 

certain respects. In fact,

 

9

 See, e.g., Nick Brown, SEC Ends Probe into Puerto Rico’s $3.5 Billion 2014 Bond Issuance: Sources, REUTERS

(Apr. 9, 2018), https://www reuters.com/article/us-puertorico-debt-sec/sec-ends-probe-into-puerto-ricos-3-5-

billion-2014-bond-issuance-sources-idUSKBN1HH05C; see also FINRA, ACCEPTANCE, WAIVER, AND 

CONSENT OF SANTANDER SECURITIES LLC, No. 2014-041355501 (Sept. 18, 2015), 

http://www finra.org/sites/default/files/fda documents/2014041355501 FDA SU7X9391.pdf. 

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III. GDB AND INVESTIGATOR SHOULD SHARE INFORMATION REGARDING 

INVESTIGATOR’S REVIEW OF GDB DOCUMENTS IN ORDER FOR 

COMMITTEE TO EVALUATE REPORT 

11. The Committee raises this final issue in an abundance of caution and for the sole 

purpose of ensuring that it will be addressed at the July 25, 2018 Omnibus Hearing, but notes 

that GDB and the Investigator have yet to outline precisely how the Investigator’s review process 

narrowed a universe of approximately GDB documents down to approximately 

. To date, the Investigator and GDB have provided only cursory answers on this 

topic, indicating only that 

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12. The Committee anticipates briefing these issues in any objection it files regarding 

the Investigator’s proposed “exit plan,” but seeks to ensure through this Informative Motion that, 

as the court has directed, the Committee is not left guessing on August 15 whether documents 

were in fact made available for the Investigator’s review and incorporated into its final report. 

 

11 The GDB provided a categorical privilege log to the Committee on June 20, 2018, and the Committees (the 

Committee and the Retiree Committee) raised a number of concerns regarding the inappropriateness of that 

log—including the assertion of “common interest privilege” without identifying the parties with whom a 

common interest was shared, the extensive references to outside “consultants,” and other issues. As a result, 

GDB has offered to provide a document-by-document log but has not committed to when that log would be 

finalized. While the Committee remains of the view that any documents provided to the Investigator may have 

been waived, it is entitled to review this document-by-document log first in order to fully evaluate the scope of 

any privilege claims asserted by GDB. 

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CONCLUSION 

For the reasons stated above, the Committee requests that all of the issues outlined above 

be addressed in detail at the July 25, 2018 Omnibus Hearing. 

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Dated: July 3, 2018 

 

/s/ Luc A. Despins, Esq. 

PAUL HASTINGS LLP 

Luc. A. Despins, Esq. (Pro Hac Vice) 

James R. Bliss, Esq. (Pro Hac Vice)

James B. Worthington, Esq. (Pro Hac Vice) 

G. Alexander Bongartz, Esq. (Pro Hac Vice) 

200 Park Avenue 

New York, New York 10166 

Telephone: (212) 318-6000 

lucdespins@paulhastings.com 

jamesbliss@paulhastings.com 

jamesworthington@paulhastings.com 

alexbongartz@paulhastings.com 

Counsel to the Official Committee of Unsecured 

Creditors

- and – 

/s/ Juan J. Casillas Ayala, Esq. 

CASILLAS, SANTIAGO & TORRES LLC 

Juan J. Casillas Ayala, Esq., USDC - PR 218312 

Diana M. Batlle-Barasorda, Esq., USDC - PR 213103 

Alberto J. E. Añeses Negrón, Esq., USDC - PR 302710 

Ericka C. Montull-Novoa, Esq., USDC - PR 230601 

El Caribe Office Building 

53 Palmeras Street, Ste. 1601 

San Juan, Puerto Rico 00901-2419 

Telephone: (787) 523-3434 

jcasillas@cstlawpr.com 

dbatlle@cstlawpr.com 

aaneses@cstlawpr.com 

emontull@cstlawpr.com 

Local Counsel to the Official Committee of Unsecured 

Creditors

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