Welcome to your weekly Title III update for July 9, 2018. This time, a lot has happened in the Title III cases.

Governor Rosselló quickly dispelled any doubts of which budget he would execute and on Thursday morning announced he would sue the Board to delimitate the bounds of the Board’s powers. At 1 pm on Thursday July 5, 2018, the complaint was filed. It states, inter alia:

Over the past several months, the Oversight Board has used the fiscal plan and budget certification processes contemplated by the Puerto Rico Oversight, Management, and Economic Stability Act, 48 U.S.C. §§ 2101-2241 (“PROMESA”), in an attempt to impose its policy preferences on Puerto Rico’s people, micromanage every aspect of budget expenditures, and exercise legislative power the Board does not have, all over the objections of Puerto Rico’s elected Government. The Board’s efforts exceed its lawful powers and should be enjoined by this Court. . .

Specifically, the Oversight Board cannot do what it is attempting to do: impose mandatory workforce reductions, change the roles and responsibilities of certain government officials, criminalize certain acts under Puerto Rico law and otherwise seek to micromanage Puerto Rico’s government.

The Commonwealth cited the Zamot decision as an important precedent preventing the Board from behaving in this fashion and is careful to claim,“the Government is not challenging certification.” This is important since section 106(e) of PROMESA purportedly strips the District Court of jurisdiction to review Board certifications. Let’s see what the Commonwealth actually objects to:

The Oversight Board’s Fiscal Plan includes the following objectionable provisions:

• Suspension of Reprogramming Authorization for Prior Fiscal Years. The Board Fiscal Plan seeks to suspend the Government’s authorization to seek reprogramming for prior fiscal years, stating that “[a]ny power of OMB, the Fiscal Agency and Financial Advisory Authority (“AAFAF”, by its Spanish acronym) or the Department of the Treasury, including the authorities granted under Act 230- 1974, as amended, known as the “Puerto Rico Government Accounting Act” (“Act 230”), to authorize the reprogramming or extension of appropriations of prior fiscal years is hereby suspended. Notwithstanding this section, the appropriations approved in the budget certified by the Oversight Board may be modified or reprogrammed with the approval of the Oversight Board.” Board Fiscal Plan § 11.2.1.
• Imposed Government Agency Consolidations. The Board Fiscal Plan attempts to dictate how the Government will organize itself to conduct day-to-day operations, including through the creation of an Office of the Chief Financial Officer and to “right-size” the Government through agency consolidation and reduction and/or elimination of government services. See Board Fiscal Plan § 12. Some, but not all, of these consolidations were agreed to by AAFAF as part of the fiscal plan development process.
• Automatic Budget Reductions for Future Fiscal Years. The Board Fiscal Plan seeks to impose automatic budget reductions on the Government, stating that, “[i]f, after the third fiscal quarter of any fiscal year there remains unrealized agency efficiency savings for any grouping relative to the projected agency efficiency savings in the New Fiscal Plan for the applicable fiscal year, the Oversight Board will automatically reduce the budget for the corresponding grouping for the following fiscal year in the amount equal to the unrealized agency efficiency savings. In particular, if the Oversight Board determines that there is material underperformance in agency efficiency savings relative to the projections set forth in the New Fiscal Plan, intentional workforce reductions will be necessary to meet the agency efficiency savings targets set forth herein.” Board Fiscal Plan § 12.3.
• Elimination of Statutorily Mandated Christmas Bonuses. The Board Fiscal Plan sets forth several recommendations affecting government-employee compensation, including: (i) instituting a hiring freeze; (ii) limiting paid holidays to 15 days annually across all public employees; (iii) prohibiting carryover of sick and vacation days between fiscal years; (iv) prohibiting any future liquidation of sick and vacation days; (v) eliminating the Christmas bonuses for all public employees; and (vi) standardizing employee healthcare benefits so that all employees receive $100 worth of benefits per month. See Board Fiscal Plan § 12.4. The Christmas bonuses that the Board Fiscal Plan seeks to eliminate are statutorily mandated under Puerto Rico’s Christmas Bonus Act, Law No. 148 of June 30, 1969 (“Law 148-1969”), as amended by Law 4-2017 and the Fiscal Plan Compliance Act, Law No. 26 of April 29, 2017 (“Law 26-2017”).

As to the Board’s budget resolutions, the Commonwealth stated:

The Budget Resolutions are not simply itemized budgets. Rather, the Oversight Board has used them to dictate substantive policy and effectively make new laws for Puerto Rico, including the following key provisions:

Section 7 of the General Fund Resolution and Special Resolution provide that: “Any power of OMB, AAFAF or the Department of the Treasury, including the authorities granted under Act 230-1974, as amended, known as the “Puerto Rico Government Accounting Act” (“Act 230”), to authorize the reprogramming or extension of appropriations of prior fiscal years is hereby suspended. Notwithstanding this section, the appropriations approved in the budget certified by the Oversight Board may be modified or reprogrammed with the approval of the Oversight Board.” Notably, this language is identical to the language in section 11.2.1 of the Board Fiscal Plan.

Section 10 of the General Fund Resolution provides that: “OMB may withhold from any of the allocations to the agencies of the Executive Branch the amounts necessary to pay for the pay-go contribution, unemployment insurance, or taxes withheld from their employees, when OMB determines that such a withholding is necessary to ensure compliance with these obligations by the agencies concerned. Any such amounts withheld by OMB shall solely be reprogrammed to pay the corresponding outstanding obligations related to pay-go contributions, unemployment insurance, or taxes withheld from employees as allowed in this Section.”

Mandates for Corrective Action. Section 15 of General Fund Resolution and section 14 of the Special Resolution provide that: “If during the fiscal year the government fails to comply with the liquidity and budgetary savings measures required by the New Fiscal Plan for Puerto Rico certified by the Oversight Board, the Government shall take all necessary corrective action, including the measures provided in PROMESA sections 203 and 204.”

Expansion of Board’s Punishment Powers for Budget Non-Compliance. Section 16 of the General Fund Resolution and section 15 of the Special Fund Resolution provide that: “The Secretary of Treasury, the treasurer and Executive Directors of each agency or Public Corporation covered by the New Fiscal Plan for Puerto Rico certified by the Oversight Board, and the Director of the OMB (or their respective successors) shall be responsible for not spending or encumbering during fiscal year 2019 any amount that exceeds the appropriations authorized for such year. This prohibition applies to every appropriation set forth in this Joint Resolution, including appropriations for payroll and related costs. Any violation of this prohibition shall constitute a violation of this Joint Resolution and Act 230.”

Funding of Oversight Board Members’ Favored Projects. The Special Resolution includes a line-item expenditure for the Institute of Puerto Rican Culture in the amount of $437,000 to fund the “operating expenses of the Luis Muñoz Marin Foundation.” Special Resolution § 1(23)(F). On information and belief, this expenditure was inserted on the express instructions of one of the Oversight Board Members. The inclusion of a pet project of an Oversight Board Member is inappropriate micro-managing, serves no discernable purpose, and aims to establish a public policy. None of the foregoing provisions in the Board Fiscal Plan and Budget Resolutions are proper exercises of the Board’s power under PROMESA or permitted by PROMESA itself. Instead, they represent overreach by the Board.

A cursory review of these objections and the request that the provisions be set aside in the complaint show that contrary to its protestations, the Commonwealth wants the court to review the certified Fiscal Plan and the certified budget. Moreover, at page 33, paragraph 78, the Commonwealth states:

To be clear, the Government does not seek a declaration that the Board Fiscal Plan was improperly certified, or that the Board Fiscal Plan suffers from any legal infirmities except to the extent set forth with respect to specific policy recommendations that cannot be imposed by the Board. (emphasis supplied)

On Friday, July 6, the Commonwealth filed a motion requesting a scheduling order from the Court, to wit:

The Court should expedite resolution of this case to address the injury to the Commonwealth and its people occurring every day due to the Board’s attempt to seize day-to-day control of Puerto Rico’s government. As set forth in the proposed order, attached as Exhibit A, Plaintiffs request the Court to shorten the time to respond to the Complaint, with either an answer or motion to dismiss due by July 12, 2018. If the Board files an answer, Plaintiffs will file a motion for summary judgment or judgment on the pleadings by July 16, with Defendants’ response due by July 20 and Plaintiffs’ reply due by July 23. If the Board files a motion to dismiss, Plaintiffs will file a response by July 17, with Defendants’ reply due by July 20. Plaintiffs’ proposed schedule ensures that all briefing will be complete by July 23. Should the Court desire oral argument, Plaintiffs request that it occur during the omnibus hearing on July 25, 2018 (or any day on or before August 3, 2018).

The proposed schedule will ensure the dispute is fully briefed and heard in less than three weeks—a schedule slightly more generous than that which the Court ordered for the CTO Motion that the Board filed on October 26, 2017.

The Board quickly opposed the motion and counter proposed the following:

Although the issues in this dispute are important and should be resolved expeditiously, plaintiffs have proposed an unrealistically short schedule presuming knowledge they do not have of Defendants’ responses and potential counterclaims. Accordingly, Defendants submit the Court should set instead the following expedited schedule, which contains the necessary flexibility to adapt to the different legal and factual defenses and counterclaims Defendants may propound:

July 18, 2018 Defendants shall answer or otherwise respond to the Complaint, listing all defenses and asserting any counterclaims.

July 19, 2018 The parties shall meet and confer on a schedule for the expeditious adjudication of the parties’ claims, including motions on any threshold issues under Fed. R. Civ. P. 12(b), discovery (if any), and motions for judgment on the pleadings, and, summary judgment.

July 20, 2018 The parties shall submit a joint statement setting forth the agreed upon schedule, and where there are differences in proposals, identify plaintiffs’ proposal and defendants’ proposal.

July 25, 2018 The parties shall be prepared to address their scheduling proposals at the omnibus hearing to the extent the Court deems it necessary.

The motion does not end there and gives us a glimpse of the Board’s future averments:

The Complaint seeks to have the Court determine how Congress allocated authority between the Oversight Board and the government of the Commonwealth. To properly present the issue to the Court requires careful and thorough briefing and possibly fact-finding. (footnote 2 omitted)

Second, Defendants’ proposed schedule is appropriately expedited to deal with the serious issues raised in the Complaint, and to be raised in the answer and counterclaim. To the extent a quick resolution is needed, this schedule provides for it. The procedural and substantive issues will be framed within two weeks, and the parties will have an opportunity to set the schedule for an expedited resolution on the merits.

Third, Plaintiffs’ supposed “uncertainty” about which budget is the operative budget (Mot. at 2, 7) is of their own making. PROMESA provides for only fiscal plans and budgets that are certified by the Oversight Board. It does not permit fiscal plans or budgets that are not certified by the Oversight Board. With full knowledge of this elemental fact, the Governor signed an uncertified budget having no force or effect under PROMESA sections 201(e)(2) and 202(e)(3). The moment that the Oversight Board certified the relevant fiscal plan and budget under PROMESA sections 201(e)(2) and 202(e)(3), they were deemed approved by the Governor and Legislature. No signatures are necessary or even relevant. The Governor’s signature on the Legislative Budget has no force and effect and cannot be used by Plaintiffs to justify emergency relief.

Fourth, Defendants take exception to Plaintiffs’ argument that the briefing schedule for the dispute last fall regarding appointment of a chief transformation officer (“CTO”) for PREPA should somehow be the yardstick for the present dispute. Although the CTO issue was significant, it did not raise anything close to the number of substantive and jurisdictional issues raised here.

Fifth, Plaintiffs’ reliance on PROMESA § 106(d) to argue for further expedition (Mot. At 5) is also misplaced. Clearly the intention of § 106(d) is to direct the courts to advance PROMESA matters relative to other non-PROMESA cases on their dockets, not to accelerate PROMESA matters beyond the pace provided for in the applicable bankruptcy rules. Section 106(d) uses the term ‘expedite’ in conjunction with the Court’s disposition of the matter, and not in conjunction with scheduling.

Sixth, Plaintiffs’ proposed schedule leaves no time for Defendants to effectively prepare counterclaims. To frame the issues appropriately, Defendants may seek declaratory judgments, injunctions, and/or related relief. This pleading (and Plaintiffs’ response) will require careful thought, for which Plaintiffs’ schedule provides inadequate time.

Finally, we add that nothing herein is intended to create subject matter jurisdiction (which parties cannot do) or to waive any rights under PROMESA Titles I, II and III. Additionally, Defendants have sought in this submission to address solely the scheduling issue presented to the Court for urgent review, not to rebut various gratuitous arguments about the merits, such as Plaintiffs’ contention (Mot. at 5) that the Oversight Board is attempting “to seize day-to-day control of Puerto Rico’s government.” Such arguments will be addressed at the proper time.

Three things stand out; one, the Board will raise the jurisdictional defense and claim that irrespective of the merits of the Commonwealth’s claims, the Court cannot entertain them. Two, the Board wants to conduct discovery. Footnote 2 of the motion states, “[p]laintiffs contend the issues in this adversary proceeding are “purely legal.” (E.g., Mot. at 6.) The Oversight Board agrees that there are significant legal issues implicated in the Complaint, upon which this dispute may be resolved. But the Complaint contains many disputed factual contentions (e.g., Complt. ¶ 59) that may be disputed and require discovery.” Paragraph 59 of the Commonwealth’s complaint is where it avers that the governor submitted a written statement pursuant to section 205(b)(3) of PROMESA. Third, the Board will file counterclaims, very possibly to test its own interpretation of PROMESA.

I remind my readers of Congressman Bishop’s brief of amicus in the First Circuit. In it he was clear that:

Once a fiscal plan is in place for the Commonwealth or a territorial instrumentality, the entity must comply with it in its official acts. Section 202, 48 U.S.C. § 2142, requires that territorial and instrumentality budgets be consistent with the fiscal plan. Section 204, 48 U.S.C. § 2144, requires that all contracts, rules, regulations, and orders conform to the fiscal plan, and gives the Oversight Board extensive powers to ensure compliance. . . In short, the fiscal plan sets policy for the covered territory or territorial instrumentality at a sufficient level to ensure fiscal responsibility and restore access to capital markets.

I must caution those relying on the Zamot opinion by Judge Swain, that on page 19, she made an important observation; there the Board was not claiming that there was a violation of the Fiscal Plan or of the Budget. Here, the Board will make that claim and invoke section 106(e) of PROMESA.

This unholy mess was created for political reasons. Since the President of the Senate refused to eliminate Law 80, the Board imposed a far stricter budget. Senator Rivera Schatz threatened he would go to Court and if he did, even if he lost, he would be a hero in the minds of many. Governor Rosselló, who wanted the Law 80 deal, calculated that he would not lose anything by challenging the Board. Although, it is obvious to everyone he will probably lose. A pro-statehood administration is defending the powers of the Territorial Commonwealth simply to be able to administer the government as it sees fit. Until this mess with the Board is resolved, there can be no Plan of Adjustment, which further delays the resolution of the Title III, risking dismissal via 11 U.S.C. §930(a)(2). Moreover, if the Board were to lose this challenge, the politicians would be in charge of the Fiscal Plan and hence the Plan of Adjustment, making it near impossible for it to be approved by creditors or even for the Court to cram it down, also resulting in dismissal of the Title III.

Judge Swain ruled late Saturday and granted the Commonwealth’s scheduling motion and ordered oral argument on the merits for the Omnibus hearing of July 25.  This means it is unlikely she will grant the Board any time for discovery on any issue and that she wants to rule on the issues quickly. Let’s see what happens.

On other news, Aurelius filed an informative motion regarding two important SCOTUS cases related to its claims:

Aurelius’s Objection and Motion to Dismiss is premised on the argument that the members of the Financial Oversight and Management Board for Puerto Rico (Board) “are Officers of the United States because they derive their authority from the federal government, are appointed by the federal government, are overseen by the federal government, and exercise significant executive authority under the laws of the United States.” Aurelius Obj. & Mot. to Dismiss at 11; see also, e.g., Aurelius Reply to U.S. 12, Dkt. 2169 (arguing that the Board is a federal entity under the standard articulated in Lebron v. National Railroad Passenger Corp., 513 U.S. 374, 397–98 (1995), because the Board was “established and organized under federal law,” it was “established ‘for the very purpose of pursuing federal governmental objectives,’” Congress can “repeal, alter,  or amend” the statute “at any time,” and the Board’s members are “appointed ‘by the President’”). For this reason, Aurelius has argued, Congress violated the separation of powers and the Appointments Clause by allowing the Board members to be appointed without Senate confirmation and by usurping a substantial portion of the President’s appointment power.

The Opposing Parties and the United States have defended the Board against this challenge chiefly by pointing to the Property Clause of the Constitution, which gives Congress the power to “make all needful Rules and Regulations respecting the Territory or other Property” of the United States. U.S. Const., Art. IV, § 3, cl. 2. For instance, the Board has contended that when Congress exercises its “plenary” power under the Property Clause, it is not “constrained by constitutional separation-of-powers provisions” in general, and “[t]he Appointments Clause” in particular “does not govern Congress’s exercise of its plenary municipal authority under Article IV to create territorial offices and designate the method of appointment.” Board Opp. at 8–9, Dkt. 1622; see also U.S. Br. 12, Dkt. 1929 (“[G]iven Congress’s wide latitude in governing the territories, the Appointments Clause is inapplicable to the appointment of territorial officers like the Oversight Board members.”).

Ortiz v. United States undermines this argument by equating the scope of Congress’s power over the territories with its broad power over the military. Ortiz held that the Supreme Court had appellate jurisdiction over cases arising from the Article I military Court of Appeals for the Armed Forces because that entity is a “court” for purposes of the Supreme Court’s appellate jurisdiction. Ortiz slip op. 5–19. In coming to this conclusion, the Ortiz Court noted that “the Constitution grants Congress broad authority over the territories: to ‘make all needful Rules and Regulations respecting’ those areas.” Id. at 12–13 (quoting U.S. Const., Art. IV, § 3, cl. 2). And the “court-martial system” at issue in Ortiz “stands on much the same footing” as the territories, where Congress has created a system of territorial courts, since it “rests on an expansive constitutional delegation,” namely, the “legislative power ‘[t]o make Rules for the Government and Regulation of the land and naval Forces,’” which is “just like” Congress’s territorial authority. Id. at 10, 11, 14 (quoting U.S. Const., Art. I, § 8, cl. 14). Thus, Congress possesses the same “plenary grant[ ] of power” over “the military” as it does over the “territories.” Id. at 14.

The Ortiz Court’s confirmation that Congress’s control over the territories is equivalent to its power over the military further demonstrates the error of the Opposing Parties’ argument. If the Opposing Parties were correct that plenary congressional authority was exempt from the Constitution’s structural guarantees, including the Appointments Clause, then the Ortiz Court’s holding makes clear that this principle would necessarily also extend to the military. But in fact it is absolutely clear that the Constitution’s structural guarantees do constrain Congress despite its “plenary” power to structure the military. In particular, there is no doubt that “the Appointments Clause applies to military officers,” Weiss v. United States, 510 U.S. 163, 170 (1994), and the Supreme Court has repeatedly emphasized that “military trial and appellate judges are officers of the United States and must be appointed pursuant to the Appointments Clause,” Edmond v. United States, 520 U.S. 651, 654 (1997); see Ryder v. United States, 515 U.S. 177 (1995). Indeed, Ortiz itself involved an Appointments Clause challenge, which the Supreme Court resolved on the merits without any suggestion that the Appointments Clause applies any differently with respect to military judges than it does with respect to other federal officers. Ortiz slip op. 23–25.

The Ortiz decision is thus irreconcilable with the Opposing Parties’ view that Congress is free to legislate in connection with the territories without regard to the Appointments Clause. As with congressional power over the military, Congress is also not immune from the Constitution’s structural guarantees when it legislates pursuant to the Property Clause, which is “just like” the military clause. See Ortiz, slip op. 14. In fact, the Ortiz Court reached this conclusion even though the amicus in that case, in his motion to participate in oral argument (which the Court granted), brought these very proceedings to the Court’s attention. Mot. of Prof. Aditya Bamzai for Leave to Participate in Oral Argument as Amicus Curiae and for Divided Argument at 4–5, Dalmazzi v. United States et al., Nos. 16-967 et al. (U.S. Dec. 14, 2017). The amicus cautioned the Court that “[i]f [it] accept[ed]” “the premise that Congress’s authority to legislate for the court-martial system is coterminous with Congress’s authority to legislate in the territories,” then that “would have dramatic implications,” because the United States is currently arguing here that “Congress’s authority over the territories is plenary and not subject to the complex distribution of powers that regulate the Federal Government.” Id. (quoting U.S. Br. 4). And the amicus reiterated this concern at oral argument, warning that, if the Supreme Court were to hold that military courts are on the same footing as territorial courts, then that would lead to separation-of-powers difficulties, because “the government’s position is that the appointments clause does not apply to the territories.” Transcript of Oral Argument at 34, Ortiz v. United States (2018) (No. 16-1423). But the Supreme Court felt no concern about equating Congress’s power over the military and the territories, thus suggesting that Congress is equally constrained by the separation of powers when it regulates either.

Aurelius references a second case, Lucia v. SEC, which I pointed out in the Monday Update of June 25. Aurelius argued:

Lucia v. SEC, meanwhile, is relevant to Aurelius’s argument that the Board members exercise the “significant authority” (Lucia slip op. 6) that qualifies them as “officers of the United States” subject to the Appointments Clause. In Lucia, the Supreme Court held that, under a straightforward application of Freytag v. Commissioner, 501 U.S. 868 (1991), an SEC ALJ is an inferior officer who must be appointed in conformity with the Appointments Clause. Lucia slip op. 6. The SEC ALJs “have equivalent duties and powers as” the judges at issue in Freytag, and therefore are just as much “officers” as the Freytag judges. Id. at 9.

This is the same argument that Aurelius has made with regard to the Board members. See Obj. & Mot. to Dismiss at 15. Like the SEC ALJs (and the judges at issue in Freytag), the Board “take[s] testimony,” “receive[s] evidence,” issues “subpoenas,” and “administer[s] oaths” to “witnesses” at “hearings.” Compare Lucia slip op. 9 with 48 U.S.C. § 2124(a), (f). Also just like the SEC ALJs, the Board exercises “significant discretion when carrying out” its “important functions,” Lucia slip op. 8, as the Board undeniably is empowered to take numerous actions in its “sole discretion,” see, e.g., 48 U.S.C. §§ 2121(d)(1)(A)–(E); 2141(a); 2142(a); 2146(a).

The Lucia Court also rejected the idea that ALJs are not officers simply because they do not have the authority to punish contempt. Lucia slip op. 10. Instead, the Court held that the power to exclude the wrongdoer from the proceedings was a powerful enough disincentive; the ALJs did not need an “especially muscular means of enforcement” such as “the power to toss malefactors in jail.” Id. Here, the Board’s power to implement its authority and to enforce a federal statute in federal court, see 48 U.S.C. § 2124(f)(2), (k), and its exclusive power to initiate Title III proceedings, id. § 2164(a), and act as the sole representative of, and decision-maker for, the Title III debtor, id. § 2175(b), are more than sufficient to satisfy this test—as demonstrated by Board Member José Carrión’s recent statement urging “the governor to reconsider his” opposition to the Fiscal Plan and stating that the Board is “ready to go to court,” warning that he “[did not] want anyone to be imprisoned,” and that “[w]hat [the Board] would be doing is enforcing a federal law.” See Caribbean Business News Service, Puerto Rico Fiscal Board Member: Too Much Pain with Too Little Promise (Apr. 19, 2018), available at http://caribbeanbusiness.com/puerto-rico-fiscal-board-member-more-pain-will-come.

Finally, the Lucia decision supports Aurelius’s arguments regarding the appropriate remedy for a violation of the Appointments Clause. Some parties have posited that the proper remedy for the Board’s structural infirmities is to accord the Board’s past actions de facto validity. Board Opp. 33–34; see AAFAF Opp., Dkt. 1640, at 32 (arguing that this Court should “declare the Board’s actions to date de facto valid, deny Aurelius’s motion to dismiss, and issue a stay to permit statutory revision or the Board’s reconstitution”); Unsecured Creditors’ Comm. Opp., Dkt. 1631, at 27 (“[T]he Oversight Board’s actions (including the title III cases) should be accorded de facto validity and the  Court should permit this proceeding to continue unimpeded.”). But the Lucia decision confirms that an Appointments Clause violation demands a meaningful remedy. As Aurelius has argued, see Obj. & Mot. to Dismiss at 34–35, a party that raises a timely Appointments Clause challenge is entitled to an appropriate remedy because “Appointments Clause remedies are designed not only to advance [the structural purposes of the Appointments Clause] directly, but also to create ‘[i]ncentive[s] to raise Appointments Clause challenges,’” Lucia slip op. 12 & n.5 (quoting Ryder, 515 U.S. at 183)).

In other news, Altair filed a motion for the lifting of the stay in regards to certain ERS bonds seeking adequate protection. As part of a deal, these bonds were partially paid out of reserves held by the Trustee bank but there will not be enough money for the August payment. In addition, the UCC filed a Motion “outlining the items that, in the Committee’s view, should be addressed at the July 25, 2018 Omnibus Hearing as part of the continuation of the court’s consideration of the Committee’s Renewed Motion Seeking Entry of Order, Under Bankruptcy Rule 2004, Authorizing Discovery With Respect to Certain Causes of Puerto Rico Financial Crisis Beginning On August 15, 2018.” The motion, which is heavily redacted, sets different areas that the Investigator’s report allegedly will not touch. It will interesting to see what Magistrate Judge Dein decides on these issues.

This summary is merely what I believe are the more salient motions and decisions in the cases. I receive an average of 20 filings each day so it would be impossible to summarize everything. If you have legal interest in these cases, I urge you to hire an attorney to represent you.