2023 Laws of Puerto Rico › TITLE THIRTEEN - Taxation and Finance (§§ 1 — 33423) › Subtitle 1 - Governmental Finances (§§ 1 — 155) › Chapter 8 - Puerto Rico Public Corporation Debt Enforcement and Recovery Act (§§ 111 — 113nn) › Subchapter II - Consensual Debt Relief (§§ 112 — 112f) › § 112d - Suspension of remedies

(a) Notwithstanding any contractual provision or applicable law to the contrary, during the suspension period, no entity asserting claims or other rights, including a beneficial interest, in respect of affected debt instruments, no trustee, no collateral agent, no indenture trustee, no fiscal agent, no bank that receives or holds funds from such eligible obligor related to the affected debt instruments, may exercise or continue to exercise any remedy under a contract or applicable law:
(1) For the non-payment of principal or interest;
(2) for the breach of any condition or covenant; or
(3) that is conditioned upon the financial condition of, or the commencement of a restructuring, insolvency, bankruptcy, or other proceedings (or a similar or analogous process) by, the eligible obligor concerned, including a default or an event of default thereunder.
(b) The term “remedy” as used in subsection (a) of this section shall be interpreted broadly, and shall include any right existing in law or contract, and any right to:
(1) Setoff;
(2) apply or appropriate funds;
(3) seek the appointment of a custodian;
(4) seek to raise rates; and
(5) exercise control over property of the eligible obligor
(c) Notwithstanding any contractual provision or applicable law to the contrary, a contract to which the eligible obligor is a party may not be terminated or modified, and any right or obligation under such contract may not be terminated or modified, at any time during the suspension period solely because of a provision in such contract conditioned on:
(1) The insolvency or financial condition of the eligible obligor at any time before the commencement of the suspension period;
(2) the commencement of the suspension period or a restructuring process under §§ 112-112f of this title; or
(3) a default under a separate contract that is due to, triggered by, or as the result of the occurrence of the events or matters in clause (1) or (2) of subsection (a) of this section.
(d) Notwithstanding any contractual provision to the contrary, a counterparty to a contract with the eligible obligor for the provision of goods or services shall, unless the eligible obligor advises to the contrary in writing, continue to perform all obligations under, and comply with all terms of, such contract during the suspension period; Provided,That the eligible obligor is not in default under such contract other than:
(1) As a result of a condition specified in subsection (c) of this section; or
(2) with respect to an essential supplier contract, as a result of a failure to pay any amounts arising prior to the commencement of the suspension period.
(e) The suspension period shall terminate automatically without further action if:
(1) An approval order for such consensual debt relief transaction is denied, and is not remedied within sixty (60) days after such denial unless otherwise provided for in an order denying the application for an approval order; or
(2) no approval application has been filed with the Court within two hundred and seventy (270) days after the commencement of the suspension period; Provided, That the suspension period may be extended for one additional period of ninety (90) days if the eligible obligor and the holders of at least twenty (20) percent of the aggregate amount of the affected debt instruments in at least one class of affected debt instruments consent to such extension.
(f) The Court shall have the power to enforce the suspension period, and any entity found to violate this section shall be liable to the eligible obligor concerned for damages, costs, and attorneys’ fees incurred by such eligible obligor in defending against action taken in violation of this section, and punitive damages for intentional or knowing violations. Upon determining that there has been a violation of the suspension period, the Court may order additional appropriate remedies, including that the act comprising such violation be declared void or annulled.
History —June 28, 2014, No. 71, § 205.