2023 Laws of Puerto Rico › TITLE THREE - Executive (§§ 1 — 9311) › Chapter 120 - Puerto Rico Emergency Moratorium and Rehabilitation Act (§§ 9281 — 9311) › Subchapter II - Moratorium for Government Entities (§§ 9291 — 9296) › § 9294 - Collateral, security interests, and priorities preserved; non impairment; remedies

(a) If a covered obligation that was otherwise or became due before or during an emergency period becomes payable at the end of the covered period as a result of this chapter, and unless an expropriation has occurred in accordance with this chapter, nothing in this chapter shall be construed to limit the rights of a holder to any collateral, security interest, or lien that secures such obligation, and nothing in this subchapter authorizes any government entity to compromise any obligation over the objection of a creditor.
(b) Unless property has been expropriated in accordance with this chapter, on motion of a party in interest and after notice and a hearing, the Court of First Instance of the Commonwealth, San Juan Part, may grant any party in interest with security or property rights, to the extent required by applicable constitutional law, adequate protection of any security or other interest in property of such party in interest resulting from actions taken or not taken in furtherance of this chapter, provided, however, that nothing in this chapter prohibits any government entity from arguing in favor of abstention, if applicable, or that adequate protection is not required, or requires a court to provide adequate protection if adequate protection is not constitutionally required.
(c) When a person’s right or interest in property is entitled to adequate protection, it may be provided by any reasonable means, including:
(1) Cash or periodic cash payments; or
(2) a replacement lien or liens (on future revenues or otherwise),
(3) in each case, solely to the extent this chapter results in a decrease in value of such entity’s interest in property subject to the lien as of the declaration of an emergency period under this chapter.
(d) Without limiting subsection (c) of this section, adequate protection of a person’s interest in cash collateral, including revenues, of the government entity, may take the form of a pledge to such person of future revenues (net of any current expenses, operational expenses or other expenses incurred under this chapter) of such government entity if-
(1) The then-current enforcement of such person’s interest would substantially impair the ability of such government entity to perform its public functions;
(2) there is no practicable alternative available to fulfill such public functions in light of the circumstances; and
(3) the generation of future net revenues to repay such person’s secured claims is dependent on the then-current continued performance of such public functions and the future net revenues will be enhanced by the then-current use of cash collateral or revenues to avoid then-current impairment of public functions.
(e) Without limiting subsections (c) and (d) of this section, a government entity may recover from or use property securing an interest of a person the reasonable, necessary costs and expenses of preserving, or disposing of, such property to the extent of any benefit to such person, including payment of expenses incurred by such government entity pursuant to or in furtherance of this chapter.
History —Apr. 6, 2016, No. 21, § 204; July 12, 2016, No. 68, § 1.17.