UNITED STATES DISTRICT COURT

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 

Re: ECF Nos. 3755, 3935

(Jointly Administered) 

In re: 

THE FINANCIAL OVERSIGHT AND 

MANAGEMENT BOARD FOR PUERTO RICO, 

as representative of

THE COMMONWEALTH OF PUERTO RICO, 

Debtor.

PROMESA 

Title III 

No. 17 BK 3283-LTS 

This Joint Status Report relates to the 

Commonwealth, HTA, and PREPA, and 

shall be in Case Nos. 17 BK 3283-LTS, 17 

BK 3567-LTS, and 17 BK 4780-LTS.

In re: 

THE FINANCIAL OVERSIGHT AND 

MANAGEMENT BOARD FOR PUERTO RICO, 

as representative of

PUERTO RICO HIGHWAYS AND 

TRANSPORTATION AUTHORITY (“HTA”), 

PROMESA 

Title III 

No. 17 BK 3567-LTS 

 

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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Debtor.

In re: 

THE FINANCIAL OVERSIGHT AND 

MANAGEMENT BOARD FOR PUERTO RICO, 

as representative of

PUERTO RICO ELECTRIC POWER AUTHORITY, 

Debtor.

PROMESA 

Title III 

No. 17 BK 4780-LTS 

JOINT STATUS REPORT IN COMPLIANCE WITH SCHEDULING ORDER 

REGARDING HEARING REQUEST AND REPLY FILED BY AUTONOMOUS 

MUNICIPALITY OF PONCE [ECF NO. 3755]

To the Honorable United States District Court Judge Laura Taylor Swain:

The Puerto Rico Fiscal Agency and Financial Authority (“AAFAF”), as the entity 

authorized to act on behalf of the Puerto Rico Power Authority (“PREPA”) and the Puerto Rico 

Highways and Transportation Authority (“HTA”) pursuant to the authority granted to it under the 

Enabling Act of the Fiscal Agency and Financial Advisory Authority, Act 2-2017, and the 

Commonwealth of Puerto Rico (the “Commonwealth” and together with PREPA and HTA, the 

“Debtors”),2and the Municipality of Ponce (“Movant” or “AMP”) respectfully submit this joint 

status report (the “Joint Status Report”) in compliance with the Scheduling Order Regarding 

Hearing Request and Reply filed by the Autonomous Municipality of Ponce [ECF No. 3755] (the

 

2 The Financial Oversight and Management Board for Puerto Rico, as the Debtors’ representative pursuant to section 

315(b) of the Puerto Rico Oversight, Management, and Economic Stability Act (“PROMESA”), has authorized (i) 

the Department of Justice to file this Joint Status Report on behalf of the Commonwealth and (ii) AAFAF to file

this Joint Status on behalf of PREPA and HTA.

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“Scheduling Order”). The Scheduling Order requests that the Parties meet and confer regarding 

the Hearing Request and file a joint status report:3

(i) Identifying any material disputed issues of fact that are relevant the disposition of 

the Motion for Partial Lift of Stay (the “Motion”) [ECF No. 3019];

(ii) providing a list of witnesses, if any, whose testimony the Parties would rely upon 

if the Court were to schedule a hearing on the Motion; and

(iii) setting forth their expectations as to the amount of time required for such hearing.

By filing this Joint Status Report, neither the Debtors nor Movant waive any rights or 

defenses, including but not limited to their respective positions set forth in their papers in support 

of and in opposition of the Motion. 

In compliance with the Scheduling Order, the Debtors and Movant hereby (i) confirm that 

they met and conferred, and (ii) submit the following responses to the three inquiries raised in the 

Scheduling Order. 

I. Material disputed issues of fact that are relevant the disposition of the Motion.

A. AMP 

i. Material disputed issues of fact that are relevant to the disposition of the 

Motion for Partial Lift of Stay (Docket Entry No. 3019 in Case No. 17-

3283, the “Motion”).

APM understand that we establish that prima facie cause exist as requested 

in IN RE R. J. Groover 411 B. R. 460 (464) Here, Mrs. Karp has made a 

prima facie showing that "cause" exists. First, the state court proceeding has 

been pending for almost three years and much of the discovery has been 

 

3 Capitalized terms used but not otherwise defined herein have the meanings given to them in the Scheduling Order 

and Commonwealth’s Response, the HTA Joinder and the PREPA Joinder (as all are defined below). 

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completed. (Factors # 1, # 10, # 11). As stated by Seventh Circuit Court of 

Appeals, "[w]here the stayed non-bankruptcy litigation has reached an 

advanced stage, courts have shown a willingness to lift the stay to allow the 

litigation to proceed." IBM v. Fernstrom Storage and Van Co. (In re 

Fernstrom Storage and Van Co.), 938 F.2d 731, 737 (7th Cir.1991); see e.g., 

Crown Heights Jewish Cmty. Council, Inc., v. Fischer (In [411 B.R. 465] re 

Fischer), 202 B.R. 341, 355 (E.D.N.Y. 1996); In re Mid-Atl. Handling Sys., 

L.L.C., 304 B.R. 111, 131 (Bankr.D.N.J. 2003); Murray Indus., Inc. v. 

Aristech Chem. Corp. (In re Murray Indus., Inc.), 121 B.R. 635, 637 

(Bankr.M.D.Fla.1990); In re Kaufman, 98 B.R. 214, 215 (Bankr. 

E.D.Pa.1989); cf. In re Sonnax Indus., 907 F.2d at 1287 (declining to lift 

stay in part because "the litigation in state court has not progressed even to 

the discovery stage."); Arnold Dev., Inc., v. Collins (In re Collins), 118 B.R. 

35, 38 (Bankr.D.Md.1990)(declining to lift stay where parties in state court 

proceeding had not yet begun discovery).

1. If it’s real that Debtor Commonwealth have to expend over $100 million dollars 

from the General Fund to finish their projects under the Agreement for the Development of 

Programmed Projects (the “Prepetition Agreement”). (see docket 3439 page 7, 10; also docket 

3911 page 13).

2. If Debtor HTA would have to spend tens of thousands of dollars annually to fund 

the cost of Monitor in “Ponce en Marcha” case. (see docket 3439 page 7)

3. If Debtor PREPA has to expend 16 million dollar to finish their Phase III and IV of 

the “Ponce en Marcha” case “Prepetition Agreement” ( see docket 3439 page 2).

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4. If the Debtor PREPA phase III of “Ponce en Marcha” under “Prepetition 

Agreement” it’s almost finish and for more than 3 years waiting to be wire the underground pipes, 

energize and connection with the houses and business of that neighborhood.

5. If that project could finish with around $700,000.00 from Debtor PREPA. If that 

Phase III project protect safety of the persons of that neighborhood.

6. If those $700,000.00 necessarily to finish Phase III constituted an “interference 

with, or diminution of Debtor’s property” and if waiting 3 years for concluding that Phase III 

constitute a “head start for collections...”( see docket 3439 page 6).

7. If the Debtor include the “Prepetition Agreement” as a claim in their reorganization 

plan would this Court must deal with the construction disputes between Debtors, Movants and 

third parties that also are part of the “Ponce en Marcha” case and got participation on those 

construction sites, like Ports Authority, Claro, Liberty Cable, Water and Sewer Authority etc. (see 

docket 3439 page 11).

8. How much of the funds of those project of the “Prepetition Agreement” will be 

diverted to whom specific creditor if those projects will be abandon by Debtors and how much 

money and resources was wasted by Debtors by abandon as is (see docket 3439 page 11).

B. Commonwealth

As stated in the Commonwealth’s Response to (A) Omnibus Reply to Opposition to Motion 

Requesting Lifting of the Stay and (B) Motion Requesting Hearing on 362 Lifting of the Stay Filed 

by Autonomous Municipality of Ponce (the “Commonwealth’s Response”) [Case No. 17 BK 3283, 

ECF No. 3911; Case No. 17 BK 3567, ECF No. 503; and Case No. 17 BK 4780, ECF No. 957],

an evidentiary hearing is not necessary to resolve the Motion and would be a waste of the 

Commonwealth and judicial resources. The Commonwealth submits that there are no material 

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disputed issues of fact that may be relevant for the disposition of the Motion, since the only 

assertion that Movant is seeking to contest by requesting an evidentiary hearing is the exact cost, 

for the Commonwealth and the other Debtors, to complete various projects under the Prepetition 

Judgment. There is no controversy that the Commonwealth would need to assume the cost of tens 

of millions of dollars to complete these projects, and whether the exact cost for the Commonwealth 

is $100 million or less, is irrelevant for purposes of disposing of the Motion. Even assuming as 

true the factual assertions in the Monitor Statement and Reply, Movant concedes that the cost of 

compliance among the Debtors would be $44,154,610.38—a substantial amount that the Debtors, 

particularly the Commonwealth, would have to assume. 

Movant has failed to establish cause for lifting the automatic stay, and the assertion for 

which Movant is seeking an evidentiary hearing, besides not being controverted, does not 

materially alter the analysis under any of the Sonnax factors. 

C. HTA

HTA submits there are no material disputed issues of fact that may be relevant for the 

disposition of the Motion. HTA has stated in all its responses to the Motion [Case No. 17 BK 3283, 

ECF No. 3661 and 3913; Case No. 17 BK 3567, ECF No. 471 and 504; and Case No. 17 BK 4780 

ECF No. 898 and 958] that the two constructions projects under the Development Agreement 

covered in the Prepetition Judgment, Project AC-000915 and Project AC-000911 (the “HTA 

Projects”) are funded by federal funds through the Federal Highway Administration’s Puerto Rico 

Highway Program, 23 U.S.C. § 165. Movant has not disputed that HTA would have to expend tens 

of thousands of dollars annually to fund the costs of the Commonwealth Court-appointed monitor 

to audit the completion of the HTA Projects. In fact, the Monitor Statement validates such fact by 

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conceding HTA would have to expend approximately between $90,000 to $150,000 per year to 

fund the costs of the Commonwealth Court-appointed monitor. See Monitor Statement at 5.

D. PREPA

PREPA submits there are no material disputed issues of fact that may be relevant for the 

disposition of the Motion. PREPA stated, in its Joinder of the Puerto Rico Fiscal Agency and 

Financial Advisory Authority on behalf of the Puerto Rico Electric Power Authority to Objection 

of the Commonwealth of Puerto Rico for Partial Lift of Stay filed by the Autonomous Municipality 

of Ponce [Case No. 17 BK 4780 ECF No. 898] that, should the stay be modified in order to 

complete the construction projects in compliance with the Prepetition Judgment, it would be 

required to spend approximately $16 million at a time when PREPA’s resources are both extremely 

limited and fully committed to the restoration and repairs of its electric system. Movant has not 

disputed that PREPA would have to divert its resources. What Movant does contest is the amount 

PREPA would have to invest to complete the project. This amount has been estimated by PREPA 

at $16 million given the scope of the work that had been contemplated in writing. Notwithstanding, 

and pursuant to the Monitor Statement, Phase IV C cannot be completed as visualized given that 

the zone at issue is a flood prone area. As a result of this, the parties had discussed the possibility 

of substituting this phase for changing poles and realigning the electrical system to minimize the 

aerial distribution presently in place. [Case No. 17 BK 4780 ECF No. 898 at p. 10.]. However, 

this proposal was never reduced to writing and thus PREPA never requested quotes for this verbal 

proposal. The difference in PREPA’s $16 million estimate and the Monitor’s estimate of $6 

million is based on this alleged agreement that, as stated, was never reduced to writing and thus is 

not binding to any of the parties involved.

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Further, Movant states that the safety of the people of Ponce is an issue of fact that has to 

be evaluated by the Court in the lift stay hearing. However, Movant has failed to bring forth any 

credible argument to sustain that having the same electrical system as the rest of Puerto Rico 

somehow threatens the safety of the people of Ponce. Lastly, the reasons Movant has provided to 

seek an evidentiary hearing, even if true for arguments’ sake, bear no relevance to the Sonnax

factors and there is no reason for this Court to lift the automatic stay at this juncture. 

II. List of witnesses, if any, whose testimony the Parties would rely upon if the 

Court were to schedule a hearing on the Motion.

A. AMP

Movant will rely on the technical and personal knowledge of monitor counselor and 

engineer Justo Varela-Dieppa who received reports and motions from Debtors’ attorneys and met

with Debtors engineer and technical. Personal during the past 5 years. 

B. Commonwealth.

Should this Court schedule an evidentiary hearing, the Commonwealth would not need to 

rely on the testimony of any witnesses. The Commonwealth submits that the Sworn Statements of 

Mabel C. Rivera Sanabria and Carlos Rubén Maldonado de León attached as Exhibits B and C, 

respectively, to the Commonwealth’s Response are sufficient evidence on which this Court can 

rely on to make a determination as to the Motion. Since the Commonwealth submits there are no 

material disputed issues of fact, the Commonwealth understands there is no need for any witnesses 

on behalf of the Commonwealth. Notwithstanding the foregoing, the Commonwealth reserves all 

rights including, requesting that this Court exclude Movant’s witness from testifying due to a 

potential conflict4and, if necessary, to cross-examine Movant’s witness. 

 

4 Mr. Varela-Dieppa is the court appointed monitor in the aforementioned Commonwealth Court case.

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C. HTA

Since there are no material disputed issues of fact with regards to HTA, HTA will not 

provide the testimony of any witness. Notwithstanding the foregoing, HTA reserves all rights to 

cross-examine Movant’s witness.

D. PREPA

Should this Court schedule an evidentiary hearing, PREPA would present the testimony of 

Eng. Walter Carrasquillo, technical representative of PREPA in the remaining Prepetition 

Judgment proceedings. 

III. Expectations as to the amount of time required for such hearing

A. AMP

The direct testimony of our expert witness could take 3 hours.

B. Commonwealth

The Commonwealth’s position is that there are no material disputed issues of fact and that 

no witnesses are necessary for the disposition of the Motion. However, if this Court decides to 

schedule an evidentiary hearing, the Commonwealth understands it will need the same time 

allocation that Movant has requested for the cross-examination of Movant’s witness. 

C. HTA

HTA’s position is that there are no material disputed issues of fact and that no witnesses 

are necessary for the disposition of the Motion. However, if this Court decides to schedule an 

evidentiary hearing, HTA understands it will need the same time allocation that Movant has 

requested for the cross-examination of Movant’s witness.

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D. PREPA

PREPA’s position is that there are no material disputed issues of fact and that no witnesses 

are necessary for the disposition of the Motion. However, if this Court decides to schedule an

evidentiary hearing, PREPA will present the testimony of Eng. Walter Carrasquillo which, with 

the assistance of a certified English interpreter, is expected to take one hour.

[Remainder of Page Left Intentionally Blank]

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Dated: October 4, 2018.

San Juan, Puerto Rico

Respectfully submitted, 

/s/ Luis C. Marini-Biaggi

Luis C. Marini-Biaggi

USDC No. 222301 

Email: lmarini@mpmlawpr.com

/s/Carolina Velaz-Rivero

Carolina Velaz-Rivero

USDC No. 300913

Email: cvelaz@mpmlawpr.com

MARINI PIETRANTONI MUÑIZ LLC

MCS Plaza, Suite 500

255 Ponce de León Ave.

San Juan, Puerto Rico 00917

Tel: (787) 705-2171

Fax: (787) 936-7494

Attorneys for the Puerto Rico Fiscal 

Agency and Financial Advisory Authority

/s/ Kevin D. Finger

Nathan A. Haynes (Admitted Pro Hac Vice)

Greenberg Traurig LLP

MetLife Building

200 Park Avenue

New York, NY 10166

Tel: (212) 801-9200

Fax: (212) 801-6400

Email: mitchelln@gtlaw.com

haynesn@gtlaw.com

David D. Cleary (admitted pro hac vice)

Kevin D. Finger (admitted pro hac vice)

Greenberg Traurig, LLP

77 West Wacker Drive

Suite 3100

Chicago, IL 60601

Tel: (312) 456-8400

Fax: (312) 456-8435

Email: clearyd@gtlaw.com

Respectfully submitted,

CARLOS FERNANDEZ-NADAL

/s/ Carlos Fernández Nadal, Esq.

USDC No. 209208

818 Hostos Ave. Ste. B

Ponce, PR, 00716

Tel: (787) 848-4612/(787)-533-6003

Fax : (787) 395-7906

Email: carlosfernandez@cfnlaw.com

Attorney for the Movant

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fingerk@gtlaw.com

Joseph P. Davis III (admitted pro hac vice)

Greenberg Traurig, LLP

One International Place, Suite 2000

Boston, MA 02110

Tel: (617) 310-6000

Fax: (617) 310-6001

Email: davisjo@gtlaw.com

Attorneys for Puerto Rico Fiscal Agency and 

Financial Advisory Authority

WANDA VÁZQUEZ GARCED 

Secretary of Justice

/s/ Wandymar Burgos Vargas

WANDYMAR BURGOS VARGAS

USDC 223502

Deputy Secretary in Litigation

Department of Justice

P.O. Box 9020192

San Juan, Puerto Rico 00902-0192

Phone: 787-721-2940 Ext. 2500, 2501

wburgos@justicia.pr.gov

Attorneys for the Commonwealth of Puerto 

Rico

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