REDONDO CONSTRUCTION CORPORATION

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Case:02-02887-ESL11 Doc#:1040 Filed:05/16/05 Entered:05/16/05 10: 34: 54 Desc:
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IN THE UNITED STATES BANKRUPTCY COURT
FOR THES Ae BR DENY ERE TO RICO

In re:

MAY 1 6 otis

REDONDO CONSTRUCTION CORP.,~" : Case No. 02-02887 (GAC)

U.8, BANKRUPTCY ‘COURT
Debtor SAN JUAN, PUERTO RIcg Chapter 11

DECISION AND ORDER

The debtor filed a voluntary petition under Chapter 11 on
March 19, 2002. On January 30, 2003, the debtor filed an urgent
motion for an order directing the Puerto Rico Ports Authority
(“PRPA”), among others, to proceed with arbitration or for leave to
proceed with adversary proceedings (dkt. #350). PRPA filed a
motion in response indicating that it would consent to having the
matters determined by this Court, if it included all
certifications, including one for which it was depositing the sum
of $453,242.20 with this Court (dkt. #369). Debtor responded by
filing another urgent motion to compel PRPA to proceed with
arbitration (dkt. #411).

On July 8, 2003, the parties filed a joint motion informing a
settlement (dkt. #500). The parties indicated that debtor would
withdraw the $453,242.20 that PRPA had deposited with the Court and
that PRPA would pay the debtor an additional $180,851.94 in partial
settlement of some of the claims, which are the object of
arbitration proceedings. In the motion, the parties agreed that

they would proceed with arbitration. The parties then filed’ the

AUTHENTICATED
U.S. GOVERNMENT
INFORMATION

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compromise agreement and request for order, inclosing their
proposed order (dkt. #543). The Court issued an order on September
30, 2003, providing that PRPA and the debtor would immediately
continue the arbitration proceedings and granted PRPA leave to
continue its counterclaims against the debtor (dkt. #572).

On October 20, 2004, the debtor, Puerto Rico Parking
Developers, S.E., and the Unsecured Creditor’s Committee filed an
urgent motion for leave to proceed with an adversary proceeding
against PRPA (dkt. #932). These entities essentially contend that
PRPA has continued engaging in tactics to delay the arbitration.
PRPA opposed the motion (dkt. #947).

The Court has reviewed the debtor’s request, including the
voluminous exhibits, all of which total 386 pages. The debtor
cites no authority for its request and the Court notes that some of
the exhibits, including pleadings in the local court case and
letters, are in the Spanish language. Irrespective, even if the
debtor's allegations as to delay are accepted as true, the Court is
not inclined to grant the motion for leave to proceed with an
adversary proceeding.

The debtor has made its bargain as to how the dispute with
PRPA will be resolved. Initially, the debtor agreed to the
arbitration forum by contract. Subsequently, the debtor chose the
forum through a suit in local court seeking to compel arbitration.

Ultimately, the debtor agreed with PRPA in this Court that the

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dispute would be resolved through arbitration. The Court also
notes that none of the allegations raised by the debtor demonstrate
that PRPA is unwilling to arbitrate. PRPA is entitled to raise
concerns before the local court as to who is appointed as
arbitrator, The type of issues that the debtor points to as being
dilatory tactics could not be avoided in an adversary, where PRPA
would have the opportunity to file a motion to dismiss, seek
summary judgment and engage in significant discovery, all of which
would cause delay; the type of delay that is allowed within the
framework of the adversarial system. The Court is sympathetic to
the debtor’s plight in that the dispute with PRPA has been pending
for more than five years without a resolution. Nonetheless, after
agreeing to arbitration by contract, seeking to compel it ina
lecal court case and agreeing to it in this Court, the Court will
not allow the debtor to bring the dispute before this Court again.
ORDER

WHEREFORE IT IS ORDERED that the urgent motion for leave to
proceed with an adversary proceeding, filed by debtor, Puerto Rico
Parking Developers, S.E. and the Unsecured Creditor’s Committee,
shall be, and it hereby is, DENIED.

SO ORDERED.

San Juan, Puerto Rico, this [& day of May, 2005
, Inf a taX

MS” GERARDO/A. CARLO
nn U.S. Bankruptcy Judge