From: stmangiaracina@aol.com

To: swaindprcorresp@nysd.uscourts.gov

Cc: stmangiaracina@aol.com

Sent: 8/15/2018 9:19:25 AM Eastern Standard Time 

Subject: Territory of Puerto Rico Bankruptcy 

 Sent Via Email & Overnight Delivery 

 Hon. Laura Taylor Swain 

 U.S.District Court S.D.N.Y. 

 500 Pearl Street 

 New York,N.Y. 10007 

 My name is Stephen T. Mangiaracina.I recently sent you emails on behalf of my 

family,regarding the above on August 10,2018, August 7, 2018June 27, 2018,June 15,2018 and 

May 17, 2018. I also copied to the Court correspondence sent to the Willke Farr & Gallagher, 

LLP on June 2, 2018. 

 I recently read Barron's (Aug, 10, 2018) Caribbean Business MSC (Aug 8,2018) reporting 

the Oversight Board release in part stating the Oversight Board for the government of Puerto 

Rico reached an agreement with debt holders to restructure the Commonwealth's Cofina 

bonds..... The consensual deal with all Cofina bondholders proves the Board's and 

Government's commitment to reach consensual agreement to Puerto Rico's debt whenever 

possible.FOMB director Natalle Jaresko said in a statement.... Under the agreement, the 

bondholders of senior and junior bonds will exchange the current notes for new senior lien notes 

backed by 54% of a 5.5 sales tax.... 

....Senior bond holders will receive 93 cents on the dollar,with an additional 2 cents for being in 

the negotiating group. Junior bondholders will receive 56.4 cents on the dollar.Good news for 

Puerto Rico is good news for three bond insurers. The losses The senior Cofina bonds held by 

MBIA (ticker),Ambac Financial Group(AMBC) and Assured Guaranty(AGO) will be "modest' 

wrote Harry Fong at MKM Partners bur are likely to be "very close" to what the bond insurers 

estimated in their loss reserves as of June 30....Shares of the three companies climbed 

Thursday.... The key point today is that the Oversight Board, Puerto Rico and bondholders have 

come to an agreement on one of the terrory's debts,Fong wrote... 

The Caribbean BusinessMCS news release is similar. 

 San Juan- In separate releases,Puerto Rico's Financial Oversight and Management Board and 

the governor both announced that the Board-as representative of the Puerto Rico Sales Tax 

Financing Corp.(Cofina by the Spanish acronym)in the bankruptcy-like process underTitle III of 

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the Puerto Rico Oversight Management and Stability Act(Promesa)-the government and a 

number of bondholders reached a deal to restructure the instrumentality debt. 

 "The agreement in principle" reached with senior and junior bondholders and monoline insurers 

includes new Cofina securities,under "terms that are aligned with the fiscal reality of Puerto 

Rico" according to the release issued by the office of Gov.Ricardo Rossello.... 

The agreement in principle is the product of a mediation process ordered by Judge Laura Taylor 

Swain.and led by Judge Barbara House and her team of mediating judges. 

 In the Board's release Executive Director Natalle Jaresko wrote that the "objective has been to 

achieve a debt restructuring agreement with all COFINA parties consistent with the agreement 

in principle reached by the agents for the COFINA and Commonwealth,the terms of which were 

announced on June 7, 2018 and we believe the agreement has honored that goal. 

 The court agreed with the proposed protocol to settle the dispute over the 5.5 percent sales & 

use tax. The designated Cofina agent is Belina Wyhte and the commonwealth agent is Luc 

Despins, who represents the Unsecured Creditors Committee(UCC) in Title III proceeding,of 

which bondholders are members.... 

.....In a statement the Cofina Senior Bondholders Coalition said: This agreement between the 

Oversight Board and a substantial number of Cofina senior and subordinate creditors marks a 

major milestone for Puerto Rico on its road to recovery. The terms lay the groundwork for future 

capital markets access,equitable recoveries and the resumption of restructured cash interest for 

all bondholders,including a large cross-section of local retirees and individuals.Importantly,the 

deal also reduces Puerto Rico's debt by approximately $7 billion ,preserves access to low-cost 

securitizations and increases the Commonwealth's FY2019 sales tax revenue by more than $360 

million. 

 In my August 7,2018 letter to you, I noted " In a business setting what the Oversight Board is 

doing,through its Agents would be defined as tortious interference with contract. 

 After reading the releases,I see i was too kind. It now appears to be a criminal enterprise to 

conspire to take what is now owned by the Cofina junior bondholders and attempting to 

legitimatize the taking by getting the Court to sign off on it. 

 First, the independent corporation Cofina is not now in Title III bankruptcy. The issue on 

motion submitted to you on April 10,2010, by the Unsecured Creditors Committee as Agent of 

the Oversight Board as representative of the Oversight board, and Bettina Whyte as Agent of the 

Oversight Board as representative of Cofina, is to determine whether it belongs in 

the Commonwealth's Title III bankruptcy.Both sides submitted opposing advisory briefs to you 

on the motion for summary judgment to this Court .This convoluted set up was necessary 

because the Oversight Board claimed it wanted to remain neutral. 

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 About a month after submission, I called Willke Farr and spoke with the primary drafter of the 

motion,arguing the formation of Cofina by the Commonwealth's legislature with the consent of 

the executive branch did not violate Puerto Rico's Constitution. He graciously helped me find the 

submission. I called him back to say he turned out some of the finest papers I ever read. The 

Cofina legislation is supported by so much case law from many other states' highest courts that 

ruled on similar issues in favor of such legislation,The courts deferred to a state's legislature, The

Commonwealth legislature in establishing Cofina did what these other states did . 

 Although I still had doubts about the Oversight Board due to its overlapping relationships,I felt 

very good, after reading the motion papers, there would be a favorable ruling that Cofina would 

not be going into the Title III bankruptcy.If Cofina wins so do its bondholders since, although 

not a named party,wee are a very interested one.This was until I learned the Oversight Board 

assigned both Agents to work on a "settlement" before this Court had ruled..The Oversight Board 

then showed its true colors that it was not neutral at all. 

 As I stated before, a government entity cannot act or disavow its own duly passed laws,The 

Oversight Board is doing that because it now sits in the Commonwealth's shoes.Here the 

legislation was passed over 10 years ago establishing Cofina,This is very prejudicial to to the 

Cofina bond holders. The Oversight Board is thus indicating to the Court it wants to avoid a 

decision which it believes will be unfavorable to it.It also takes with it the Willke Farr law 

firm,after it wrote and submitted winning motion papers to the Court, to help negotiate with the 

unsecured creditors, Willke Farr should have refused and I said so. Does this encourage the 

Court to ignore their winning papers and let the motion die. Te Oversight Board is now sending 

out self serving joint press releases, about the recent claim of settlement :as to whether if Cofina 

is part of the Title III bankruptcy is of no concern, because it is a fait accompli. Various 

participants claim what a great accomplishment the"settlement' is,about how great it is for Puerto 

Rico and so many others.I do not mean any disrespect, but are they trying to scare you off from 

some unfinished business like a decision or if you did render a decision, because of the 

pressure, it would most likely go against Cofina .?

 Even though it is doing so without a legal basis, it is also shutting the Cofina jujnior 

bondholders out of negotiations.it is clear from the news releases placed by the Oversight Board 

that the juniors were not represented in the "agreement" negotiation.One Agent represented the 

unsecured creditors, with the help of the institutional holders representative and the insurance 

carrier's representative insuring the senior Cofina bonds 

 The 2 cents on the dollar given to senior bond holders to cover their legal expenses for being in 

the negotiating group. The junior bond holders were not awarded this because we were not 

included. at the table. 

 Senior bond holders have a priority over juniors only if Cofina were to default.Here Cofina has 

enough money to meet all its obligations to both seniors and juniors. If the juniors were at the 

table, the response would be that "we get what you get or we are out of here". 

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 The lack of our presence allowed the senior Cofina's to get for all practical purposes payment in 

full without the court making a decision as to whether Cofina goes into the Title 

III bankruptcy.The insurance carrier guarantor for the seniors had its loss exposure 

reduced because of what was taken from the absent juniors, 

 The notice that was given in the Caribbean Business MCS release, given by the Financial 

Oversight and Management Board,states "In a statement,the Senior Bondholders Coalition said '' 

This agreement between the Oversight Board and a substantial number of COFINA senior and 

subordinate creditors marks a major milestone for Puerto Rico on its road to rercovery" Why use 

the term subordinate rather than junior ? 

 I understand there is another request for an extention before you make a decision. This time 60 

days so they can present some agreement to you..Wouldn't it be something if their thinking is 

presentation of a fully executed settlement document for you to sign off on and they also have 

an order for you to sign addressing your decision on the motion now before you since its 

submission on August `10,2018. 

 Did the Oversight Board pull a bait and switch to gain total control over the Title III bankruptcy 

issue and Cofina? In claiming neutrality ,appointing two Agents,one for the unsecured creditors 

and one for Cofina, with each to brief and argue one side of the motion, the Oversight Board has 

been able to view the submissions to the Court and determine that the unsecured creditors would 

lose and Cofina would remain tndependant to meet its original obligations to its bondholders. 

So with no intention of waiting for this decision, it went into 

" settlement mode" where it now controls both sides to get a desired outcome 

which if approved,it will ripoff the Cofina junior bondholders 

 The Oversight Board and the unsecured creditors , with the "settlement" terms that have now 

been published,have thus admitted that Cofina was validly created by the Commonwealth 

legislature . The plan is to have Cofina continue to exist, This is an admission that the legislature 

did not violate Puerto Rico's constitution in creating Cofina. 

This is an excerpt from your hearing on April 10,20189 as reported by Nick brown,Edited by N. 

Zieminski ; 

 Stancil and other GO side lawyers said debt is senior to all obligations. 

 GO holders have the first claim on " available sources. 

 Stancil said and it can't just be assumed away that 

 available resources means whatever the legislature 

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 says" 

 " it's up to the court to define,'he said. 

 Judge Swain had pointed questions,though, 

 How she asked Stancil " Is the court in position 

 to determine whether babies should eat or traffic lights 

 fiixed before bondholders get paid? 

 Swain also noted that Puerto Rico's constitutional debt limit 

 only applied to debt backed by Puerto Rico's full faith and credit, 

 such as GO debt. 

 It could have been written to encompass all debt,she said 

 but it wasn't written that way" 

 I believe after hearing you,is when a firm decision was made, by the Oversight Board and the 

unsecured creditors,to act quickly to entertain "settlement" even though there is no authority to 

do so.without a decision and order by you.They saw the handwriting on the wall and believed 

then and now that they will lose.It is clear you were referring to the Cofina bondholders waiting 

to be paid. 

In speaking with insiders to the proposed "settlement" that, while the goal is have it completed 

by the end of the year,that is not likely and normally in these situations interest will not be 

paid,before a decision and order by the Court. 

 Cofina junior bondholders should not be forced into an unsecured creditor class subject to 

majority votes and the actions of others beyond our control,so as to help Puerto Rico out of 

bankruptcy and reduce the loses of the unsecured creditors and others. 

 The unsecured creditors filed a claim stating Cofina should be in Title III bankruptcy, 

submtted briefs and argued in a proceeding before you on April 10, 2018 when the motion was 

submitted for a decision on the merits and then,instead of waiting for that decision, the 

Oversight Board quickly began "settlement" machinations; sent out self serving press releases, 

along with input from other participants stating how great this all is for Puerto Rico, claiming 

success while inferring that Cofina is already in Title III bankruptcy.It was wrongful to ever 

begin going down this road so as to deny Cofina junior bondholders,such as my family, the due 

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process of a decision on the merits by you,before our money is taken from us. 

 Just our rejection of what is going on is sufficient to stop this take over attempt of Cofina, 

which is in effect a takeover of Cofina junior bond holders' property. 

 I believe there are grounds for a referral to the Department of Justice for investigation.This will 

not go away. 

 I respectfully ask the Court to render a decision and remove the stay sua sponte.Thank you. 

 Stephen T. Mangiaracina 

 5 Salem Road 

 Hilton Headf Island,SC 29928 

 Tel. 843 785 5800 

 Fax.843 785 5800 

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