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 III - Debt Enforcement (§§ 113 — 113nn) › § 113x - Unenforceable ipso facto clauses; assignment of contracts

(a) Notwithstanding any contractual provision or applicable law to the contrary, a contract of a petitioner may not be terminated or modified, and any right or obligation under such contract may not be terminated or modified, at any time after the filing of a petition under §§ 113-113nn of this title solely because of a provision in such contract conditioned on:
(1) The insolvency or financial condition of the petitioner at any time before the closing of the case;
(2) the filing of a petition pursuant to § 113 of this title and all other relief requested under this chapter; 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 this subsection.
(b) Notwithstanding any contractual provision to the contrary, a counterparty to a contract with the petitioner for the provision of goods or services shall, unless the petitioner advises to the contrary in writing, continue to perform all obligations under, and comply with all terms of, such contract, provided that the petitioner is not in default under such contract other than:
(1) As a result of a condition specified in subsection (a) 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 date when the petition is filed.
(c) All claims against the petitioner arising from performance by a contract counterparty pursuant to subsection (b) of this section, after the date when the petition is filed, shall have the status of an administrative expense. Failure by such contract counterparty to satisfy the requirement of subsection (b) of this section shall result in compensatory damages to the petitioner, in an amount determined by the Court.
(d) Notwithstanding any contractual provision to the contrary, except as set forth in subsection (e) of this section, on notice to the counterparty under the contract and upon Court approval, a petitioner can assign any contract, if the petitioner cures-or provides adequate assurance it promptly will cure-any default under such contract, other than a default that is a breach of an unenforceable provision under applicable law. Defaults on nonmonetary obligations that cannot reasonably be cured by nonmonetary actions may be cured as best as practicable with money damages.
(e) A petitioner shall not assign a contract of the petitioner, whether or not such contract prohibits or restricts assignment of rights or delegation of duties, if:
(1) Applicable law excuses a party, other than the petitioner, to such contract from accepting performance from or rendering performance to the petitioner or to an assignee of such contract, and such party does not consent to such assumption or assignment; or
(2) such contract is a contract to make a loan, or extend other debt financing or financial accommodations, to or for the benefit of the petitioner, or to issue a security or other instrument of the petitioner.
(f) Only a party to a contract that a petitioner seeks to assign and having the right under such contract to enforce such contract, or such party’s authorized representative, shall have standing to object to and be heard on the petitioner’s requests pursuant to this section.
History —June 28, 2014, No. 71, § 325.