In re Fin. Oversight & Mgmt. Bd. for P.R.

645 B.R. 328

IN RE: The FINANCIAL OVERSIGHT AND MANAGEMENT BOARD FOR PUERTO RICO, as representative of The Commonwealth of Puerto Rico et al.,

Debtors.

In re: The Financial Oversight and Management Board for Puerto Rico, as representative of The Puerto Rico Highways and Transportation Authority, Debtor.

No. 17 BK 3283-LTS (Jointly Administered)

No. 17 BK 3567-LTS

United States District Court, D. Puerto Rico.

Signed October 12, 2022

Ann M. Ashton, Ralph C. Ferrara, Proskauer Rose LLP, Washington, DC, Chantel L. Febus, Proskauer Rose LLP, New York, NY, for Debtor Puerto Rico Sales Tax Financing Corporation (COFINA).

Ehud Barak, Martin J. Bienenstock, Bradley R. Bobroff, Margaret A. Dale, Peter D. Doyle, Carl Forbes, Jr., Mark D. Harris, Jeffrey W. Levitan, Matthew J. Morris, Kevin J. Perra, Stephen L. Ratner, Brian S. Rosen, Scott Rutsky, Chris Theodoridis, Jared D. Zajac, Proskauer Rose LLP, New York, NY, Hermann D. Bauer Alvarez, Ubaldo M. Fernandez Barrera, Carla Garcia Benitez, O'Neill & Borges LLC, San Juan, PR, Ricardo Burgos Vargas, Juan Carlos Ramirez-Ortiz, San Juan, PR, Wandymar Burgos Vargas, Valerie Concepcion-Cintron, Susana I. Penagaricano-Brown, Puerto Rico Department of Justice, San Juan, PR, Josue N. Torres Crespo, Apt. SGB-11, Condominio Monte Sur, San Juan, PR, Guy Brenner, Proskauer Rose LLP, Washington, DC, Adele M. El-Khouri, Chad I. Golder, Rachel G. Miller Ziegler, Donald B. Verrilli, Munger, Tolles & Olson LLP, Washington, DC, Lucia Chapman, Stephan E. Hornung, Michael Luskin, Luskin, Stern & Eisler LLP, White Plains, NY, Paul V. Possinger, Proskauer Rose LLP, Chicago, IL, William D. Dalsen, Michael R. Hackett, Timothy W. Mungovan, Laura Stafford, Proskauer Rose LLP, Boston, MA, Michael A. Firestein, Lary Alan Rappaport Jennifer L. Roche, Steven O. Weise, Proskauer Rose LLP, Los Angeles, CA, Michel Mir Martinez, Barriada La Carmen, Salinas, PR, for Debtor Commonwealth of Puerto Rico.

Katiuska Bolanos, Arturo Diaz-Angueira, Diaz & Vazquez Law Firm, P.S.C., San Juan, PR, Joseph P. Davis, III, Greenberg Traurig, LLP, Boston, MA, Maria J. Diconza, Daniel S. Shamah, O'Melveny & Myers LLP, New York, NY, Michael Kelly Malone, King & Spalding LLP, New York, NY, Hadassa R. Waxman, Proskauer Rose LLP, New York, NY, for Debtor Puerto Rico Electric Power Authority.

Raul Castellanos-Malave, Development & Construction Law Group LLC, San Juan, PR, for Debtor Puerto Rico Highways and Transportation Authority.

Luc A. Despins, Paul Hastings LLP, New York, NY, for Trustee Drivetrain LLC.

Julio Guzman Carcache, U.S. Trustee Program, San Juan, PR, for U.S. Trustee US Trustee-Region 21.

Monsita Lecaroz Arribas, San Juan, PR, Pro Se.

Brett D. Fallon, Jaclyn C. Marasco, Faegre Drinker Biddle & Reath LLP, Wilmington, DE, Roger A. Maldonado, Faegre Drinker Biddle & Reath LLP, Minneapolis, MN, for Defendant Quest Diagnostics of Puerto Rico, Inc.

Ehud Barak, Martin J. Bienenstock, Bradley R. Bobroff, Chantel L. Febus, Stephen L. Ratner, Maja Zerjal, Proskauer Rose LLP, New York, NY, Hermann D. Bauer Alvarez, Ubaldo M. Fernandez Barrera, Carla Garcia Benitez, O'Neill & Borges LLC, San Juan, PR, Raul Castellanos-Malave, Development & Construction Law Group LLC, San Juan, PR, Lucia Chapman, Stephan E. Hornung, Michael Luskin, Luskin, Stern & Eisler LLP, White Plains, NY, Michael A. Firestein, Lary Alan Rappaport, Steven O. Weise, Proskauer Rose LLP, Los Angeles, CA, Emanuel Rier, Carolina, PR, for Debtor Puerto Rico Highways and Transportation Authority.

Monsita Lecaroz Arribas, San Juan, PR, Pro Se.

PROMESA Title III

ORDER AND JUDGMENT CONFIRMING MODIFIED FIFTH AMENDED TITLE III PLAN OF ADJUSTMENT OF THE PUERTO RICO HIGHWAYS AND TRANSPORTATION AUTHORITY

Laura Taylor Swain, United States District Court Judge

TABLE OF CONTENTS

1. Confirmation of the HTA Plan...333

2. Objections...333

3. Findings/Conclusions...334

4. Litigation Resolution...337

5. HTA Plan Settlements Approved...338

6. Dismissal of GO/Clawback Litigation...338

7. Implementation of the HTA Plan...338

8. Enforceability of New Debt Instruments...338

9. HTA Avoidance Actions...339

10. Funding, Costs, and Expenses of the Avoidance Actions Trust...339

11. Indemnification of Avoidance Actions Trustee and Board...339

12. No Action...340

13. Government Action...340

14. Oversight Board Consent Pursuant to Section 305 of PROMESA...341

15. Binding Effect...341

16. Cancellation of Notes, Instruments, Certificates, and Other Documents...341

17. Rejection or Assumption of Remaining Executory Contracts and Unexpired Leases...342

18. Insurance Policies...343

19. Rejection Damages Claims...343

20. Payment of Cure Amounts...343

21. Setoff...343

22. Delivery of Distributions...344

23. Disbursing Agent...348

24. Payment of Trustee Fees and Expenses...348

25. Securities Laws Exemption...349

26. Acceleration of Insured Bonds...349

27. Disputed Claims Reconciliation...350

28. Disputed Claims Holdback...352

29. No Amendments to Proofs of Claim...352

30. Conditions to HTA Effective Date...353

31. Administrative Claim Bar Date...353

32. Professional Compensation and Reimbursement Claims...353

33. HTA Consummation Costs...354

34. HTA Restriction Fee...354

35. HTA/CCDA Clawback Structuring Fees...356

36. DRA Restriction Fee...356

37. Discharge and Release of Claims and Causes of Action...356

38. Releases by the Debtor and Reorganized Debtor...359

39. Release and Exculpation Provisions...359

40. Injunction on Claims ...360

41. Injunction Related to Releases ...360

42. Exculpation...361

43. GUC Reserve...363

44. Appointments Related Litigation...363

45. Bar Order ...363

46. Supplemental Injunction ...364

47. Term of Existing Injunctions or Stays...365

48. Prosecution of Claims...365

49. Indemnification and Reimbursement Obligations...365

50. Compliance with Tax Requirements...365

51. Documents and Instruments...366

52. Fiscal Plan...366

53. Oversight Board Termination and Post-Confirmation Powers...366

54. Post-Confirmation Fiscal Plans and Budgets Remain Subject to Oversight Board's Sole Discretion...366

55. Government Post-Confirmation Powers and Duties...366

56. Asserted Surety Claims...367

57. Reversal/Stay/Modification/Vacatur of Order...367

58. Retention of Jurisdiction...367

59. Conflicts Among Documents...367

60. Modifications...368

61. Provisions of Plan and Order Nonseverable and Mutually Dependent...368

62. Governing Law...368

63. Applicable Non-Bankruptcy Law...368

64. Waiver of Filings...368

65. Notice of Order...369

66. No Waiver...369

Exhibit A HTA Plan...369

Exhibit B Form of Notice...485

Exhibit C Preempted Laws...487

The Puerto Rico Highways and Transportation Authority ("HTA" or the "Debtor"), by and through the Financial Oversight and Management Board for Puerto Rico (the "Oversight Board"), as Title III representative of the Debtor under section 315(b) of the Puerto Rico Oversight, Management, and Economic Stability Act ("PROMESA"),² having proposed and filed with the United States District Court for the District of Puerto Rico (the "Court") the Modified Fifth Amended Title III Plan of Adjustment of the Puerto Rico Highways and Transportation Authority , dated September 6, 2022 (Docket Entry No. 1404 in Case No. 17-3567)³ (as amended, supplemented, or modified prior, at, or subsequent to the HTA Confirmation Hearing as set forth in this Confirmation Order through the date hereof, including the Plan Supplement, and as may be amended, supplemented, or modified pursuant to section 313 of PROMESA, the "HTA Plan" through the date hereof);⁴ and the Court having entered, pursuant to, inter alia, section 1125 of the Bankruptcy Code and Bankruptcy Rule 3017(b), after due notice and a hearing, an order, dated June 22, 2022 (Docket Entry No. 1248) (the "Disclosure Statement Order"), (i) approving the adequacy of the information set forth in the Disclosure Statement, (ii) establishing procedures for the solicitation, voting, and tabulation of votes on and elections with respect to the HTA Plan, (iii) approving the forms of ballots, master ballots, and election notices used in connection therewith, and (iv) approving the form of notice of the HTA Confirmation Hearing; and the Court having entered the Order Establishing, Among Other Things, Procedures and Deadlines Concerning Objections to Confirmation and Discovery in Connection Therewith, dated June 22, 2022 (Docket Entry No. 1249); and the following documents having been filed by the Debtor or the HTA/CCDA PSA Creditors in support of or in connection with confirmation of the HTA Plan:

(a) Plan Supplement (Docket Entry No. 1405-7);

(b) Affidavit of Service of Solicitation Materials (Docket Entry No. 1324) (the "Mailing Affidavit");

(c) Affidavit of Publication and Radio Advertisements (Docket Entry No. 1342) (the "Publication & Radio Affidavit" and, together with the Mailing Affidavit, the "Service Affidavits");

(d) Debtor's Omnibus Reply to Objections to Confirmation of the Fourth Amended Title III Plan of Adjustment of the Puerto Rico Highways and Transportation Authority (Docket Entry No. 1361) (the "Omnibus Reply");

(e) Memorandum of Law in Support of Confirmation of the Fourth Amended Title III Plan of Adjustment of the Puerto Rico Highways and Transportation Authority (Docket Entry No. 1360) (the "Confirmation Brief");

(f) Declaration of David Skeel in Respect of Confirmation of Fourth Amended Title III Plan of Adjustment for the Puerto Rico Highways and Transportation Authority (Docket Entry No. 1357);

(g) Declaration of David M. Brownstein in Respect of Confirmation of Fourth Amended Title III Plan of Adjustment of the Puerto Rico Highways and Transportation Authority (Docket Entry No. 1358);

(h) Declaration of Ojas N. Shah in Respect of Confirmation of Fourth Amended Title III Plan of Adjustment of the Puerto Rico Highways and Transportation Authority (Docket Entry No. 1359);

(i) Declaration of Jay Herriman in Respect of Confirmation of Fourth Amended Title III Plan of Adjustment of the Puerto Rico Highways and Transportation Authority (Docket Entry No. 1355);

(j) Declaration of Christina Pullo of

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