Ambac Assurance Corp. v. Commonwealth (In Re Fin. Oversight & Mgmt. Bd. for Puerto Rico)

United States Court of Appeals
For the First Circuit
No. 18-1214
IN RE: THE FINANCIAL OVERSIGHT AND MANAGEMENT BOARD FOR PUERTO
RICO, as representative for the Commonwealth of Puerto Rico; THE
FINANCIAL OVERSIGHT AND MANAGEMENT BOARD FOR PUERTO RICO, as
representative for the Puerto Rico Highways and Transportation
Authority,
Debtors.
AMBAC ASSURANCE CORPORATION,
Plaintiff, Appellant,
v.
COMMONWEALTH OF PUERTO RICO, through the Secretary of Justice;
FINANCIAL OVERSIGHT AND MANAGEMENT BOARD; PUERTO RICO FISCAL
AGENCY AND FINANCIAL ADVISORY AUTHORITY, through the Secretary
of Justice; PUERTO RICO HIGHWAYS AND TRANSPORTATION AUTHORITY,
through the Secretary of Justice; RICARDO ROSSELLO NEVARES,
through the Secretary of Justice; RAUL MALDONADO GAUTIER,
through the Secretary of Justice; JOSE IVAN MARRERO-ROSADO; JOSE
B. CARRION, III; CHRISTIAN SOBRINO VEGA; ANDREW G. BIGGS; CARLOS
M. GARCIA; ARTHUR J. GONZALEZ; JOSE R. GONZALEZ; ANA J.
MATOSANTOS; DAVID A. SKEEL, JR.; ELIAS SANCHEZ,
Defendants, Appellees,
OFFICIAL COMMITTEE OF UNSECURED CREDITORS,
Intervenor,
JOHN DOES 1–12,
Defendants.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF PUERTO RICO
[Hon. Laura Taylor Swain, U.S. District Judge*]
Before
Torruella, Lipez, and Kayatta,
Circuit Judges.
Atara Miller, with whom Dennis F. Dunne, Andrew M. Leblanc,
Grant F. Mainland, Milbank, Tweed, Hadley & McCloy LLP, Roberto A.
Cámara-Fuertes, and Ferraiouli LLC were on brief, for appellant.
Mark C. Ellenberg, Howard R. Hawkins, Jr., Lary Stromfeld,
Ellen V. Holloman, Gillian Groarke Burns, Thomas J. Curtin, Casey
Servais, Cadwalder, Wickersham & Taft LLP, Heriberto Burgos Pérez,
Ricardo F. Casellas-Sánchez, Diana Pérez-Seda, Casellas Alcover &
Burgos, Maria E. Picó, Rexach & Picó, CSP, Martin A. Sosland, Jason
W. Callen, and Butler Snow LLP on brief for Assured Guaranty
Corporation, Assured Guaranty Municipal Corporation, and Financial
Guaranty Insurance Company, amici curiae.
Vincent Levy, Daniel M. Sullivan, Margot Hoppin, Evan H.
Stein, and Holwell Shuster & Goldberg LLP on brief for Professor
John W. Ely, Jr., amicus curiae.
Bruce R. Zirinsky and Zirinsky Law Partners LLC on brief for
Representative Rob Bishop, amicus curiae.
Martin J. Bienenstock, with whom Stephen L. Ratner, Mark D.
Harris, Michael A. Firestein, Lary Alan Rappaport, Timothy W.
Mungovan, John E. Roberts, Proskauer Rose LLP, Hermann D. Bauer-
Alvarez, and O'Neill & Borges LLC were on brief, for appellee
Financial Oversight and Management Board for Puerto Rico.
Peter M. Friedman, with whom Isaías Sánchez-Báez, Solicitor
General of Puerto Rico, Carlos Lugo-Fiol, John J. Rapisardi,
Elizabeth L. McKeen, Ashley M. Pavel, O'Melveny & Myers LLP, Luis
Marini, and Marini Pietrantoni Muñoz, LLC were on brief, for
appellees the Puerto Rico Fiscal Agency and Financial Advisory
Authority, Christian Sobrino Vega, Ricardo Rosselló Nevares, Raul
Maldonado Gautier, and Jose Ivan Marrero Rosado.
Paul S. Samson, Riemer & Braunstein LLP, Gregory E. Garman,
Erick T. Gjerdingen, and Garman Turner Gordon LLP on brief for
Congressman Raúl Grijalva, ranking member of the House Committee
on Natural Resources, and Congresswoman Nydia Velázquez, member of
*Of the Southern District of New York, sitting by designation.
the House Committee on Natural Resources, amici curiae.
Luc A. Despins, with whom Nicholas A. Bassett, Paul Hastings
LLP, Juan J. Casillas Ayala, and Casillas, Santiago & Torres LLC
were on brief, for the Official Committee of Unsecured Creditors
of All Puerto Rico Title III Debtors (Other than COFINA).
June 24, 2019
KAYATTA, Circuit Judge. Ambac is a financial guaranty
insurer and individual holder of Puerto Rico Highways and
Transportation Authority (HTA) bonds. In this Title III adversary
proceeding arising within HTA's debt-adjustment proceedings
pursuant to the Puerto Rico Oversight, Management, and Economic
Stability Act (PROMESA), Ambac brings constitutional and statutory
challenges to measures the Commonwealth of Puerto Rico has taken
to block payments to holders of HTA bonds. Because the Title III
court lacks the authority to grant the declaratory and injunctive
relief that Ambac seeks, we affirm the dismissal of Ambac's claims.
I.
Because this appeal comes before us from the dismissal
of Ambac's constitutional and statutory claims, "we take as true
the facts presented in [Ambac's] complaint and draw all reasonable
inferences in [its] favor." Maloy v. Ballori-Lage, 744 F.3d 250,
251 (1st Cir. 2014).
HTA develops, operates, and maintains Puerto Rico's
highways and transportation infrastructure. It has the ability to
issue bonds to finance its operations pursuant to the Puerto Rico
Highways and Transportation Authority Act, P.R. Laws Ann. tit. 9,
§ 2012. In 1968 and 1998, HTA adopted resolutions issuing bonds.
The resolutions set forth the contractual relationship between HTA
and bondholders and "pledge[]" for the payment of "principal,
interest and premiums" certain "[r]evenues" and "funds received by
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[HTA] . . . from the Commonwealth" (referred to here as "HTA
revenues"). P.R. Highways & Transp. Authority, Resolution No. 98-
06, at 58 [hereinafter 1998 Resolution]; see also P.R. Highways
& Transp. Authority, Resolution No. 68-18, at 50 [hereinafter 1968
Resolution]. The HTA revenues include, among other funds: (1) "all
moneys received by [HTA] on account of the crude oil tax allocated
to [HTA] by Act No. 34"; (2) proceeds from gasoline and oil taxes
and from annual motor-vehicle license fees; (3) "any tolls or other
charges imposed by [HTA]"; and (4) "the proceeds of any other
taxes, fees or charges" that the Puerto Rico legislature authorizes
for payment of "principal of and interest on bonds or other
obligations of [HTA]." 1998 Resolution at 7, 13; see also 1968
Resolution at 11 (employing a similar definition of HTA revenues).
The bond resolutions require HTA to deposit the HTA
revenues on a monthly basis with a fiscal agent, the Bank of New
York Mellon, which holds the funds in trust for bondholders and
then pays bondholders in accordance with the terms of the
resolutions. 1998 Resolution at 47; 1968 Resolution at 42. The
resolutions further provide that the bondholders' interest in the
HTA revenues is paramount, subject to one qualification:
Commonwealth law requires that revenues be used to first pay
interest and amortization of the public debt (i.e., general
obligation bonds) in years in which other available resources are
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insufficient to meet appropriations. See P.R. Const. art. VI,
§ 8; see also 1998 Resolution at 19; 1968 Resolution at 17.1
A succession of related events upset the parties'
contractual arrangement concerning the HTA revenues, giving rise
to this lawsuit. In brief, the Commonwealth and Governor of Puerto
Rico promulgated a series of laws and executive orders -- known as
the "Moratorium Laws and Orders" -- that halted the flow of
revenues from the Commonwealth and HTA to the fiscal agent for
payment to bondholders and, instead, directed those revenues to
the payment of other, ordinary Commonwealth expenses.2 The
Moratorium Laws and Orders also stayed creditor remedies to enforce
their contractual rights under the bondholder resolutions.
1Ambac alleges that the HTA revenues fall within the category
of "special revenues" as defined in the municipal-bankruptcy code,
see 11 U.S.C. § 902(2); 48 U.S.C. § 2161(a) (incorporating 11
U.S.C. § 902 into PROMESA), and that it has a security interest in
all such revenues. Intervenor the Official Committee of Unsecured
Creditors of All Puerto Rico Title III Debtors (Other than COFINA)
contests at least the latter point and urges us to construe Ambac's
security interest narrowly as extending only to HTA revenues
actually deposited with the fiscal agent. As will become evident,
the resolution of this issue is not necessary to settle the
immediate appeal.
2See, e.g., Puerto Rico Emergency Moratorium and Financial
Rehabilitation Act, P.R. Laws Ann. tit. 3, §§ 9282–9288 (codifying
then-Governor Alejandro García Padilla's moratorium orders and
granting him the authority to suspend the Commonwealth's debt
obligations); see also Puerto Rico Financial Emergency and Fiscal
Responsibility Act, P.R. Laws Ann. tit. 3, §§ 9431–9437
(indefinitely continuing the moratorium orders).
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Thereafter, the Financial Oversight and Management Board
for Puerto Rico ("Oversight Board") -- established by PROMESA, 48
U.S.C. §§ 2101–2241, and tasked with "provid[ing] a method for
[Puerto Rico] to achieve fiscal responsibility and access to the
capital markets," id. § 2121(a) -- certified a "Fiscal Plan" for
Puerto Rico to which all Commonwealth laws and budgets must
conform, see id. §§ 2141(c), 2144(a)–(c). The Fiscal Plan calls
for the continued diversion of HTA revenues over the course of the
next decade.3 The Oversight Board, pursuant to its authority under
section 304 of PROMESA, id. § 2164(a), subsequently initiated
Title III debt-adjustment proceedings on behalf of HTA, which also
triggered an automatic stay of actions to collect preexisting debts
from the agency, 11 U.S.C. § 362(a)(1), (5); 48 U.S.C. § 2161(a)
(incorporating 11 U.S.C. § 362). The Puerto Rico Fiscal Agency
and Financial Advisory Authority (AAFAF) then ordered the Bank of
New York Mellon, as fiscal agent, to halt payments to HTA
bondholders, reasoning that the funds held in trust are still the
property of the Commonwealth and their application to HTA bonds
would violate the automatic stay. In July 2017, HTA defaulted on
a bond payment in the amount of $219 million.
Ambac, which is both a holder and insurer of the
defaulted HTA bonds, commenced this adversary action in the so-
3In April 2018, the Oversight Board certified a new Fiscal
Plan that continues the diversion of HTA revenues.
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called "Title III court," bringing Contracts Clause, Takings
Clause, Due Process Clause, preemption, and statutory challenges
to the Commonwealth's actions. Ambac asked that court to declare
as null the Moratorium Laws and Orders and the Fiscal Plan, and it
sought a negative injunction preventing the Commonwealth from
continuing to impair the flow of HTA revenues to bondholders. The
Title III court carefully reviewed and rejected all of Ambac's
requested relief, dismissing the complaint with prejudice. See
Ambac Assurance Corp. v. Puerto Rico (In re Fin. Oversight & Mgmt.
Bd. for P.R.), 297 F. Supp. 3d 269 (D.P.R. 2018). Ambac then filed
this timely appeal.
II.
Two sections of PROMESA prevent the Title III court from
granting the relief that Ambac requests in this adversary
proceeding.
A.
Section 106 of PROMESA provides: "There shall be no
jurisdiction in any United States district court to review
challenges to the Oversight Board's certification determinations
under this chapter." 48 U.S.C. § 2126(e). As this court recently
explained, "PROMESA grants the Board exclusive authority to
certify Fiscal Plans and Territory Budgets for Puerto Rico. It
then insulates those certification decisions from judicial
review . . . ." Méndez-Núñez v. Fin. Oversight & Mgmt. Bd. for
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P.R., (In re Fin. Oversight & Mgmt. Bd. for P.R.), 916 F.3d 98,
112 (1st Cir. 2019). In its First Amended Complaint, Ambac
repeatedly requests "injunctive relief invalidating the Oversight
Board's certification of the Fiscal Plan." This relief is plainly
precluded as a result of section 106 and our holding in Méndez-
Núñez.
B.
Section 305 of PROMESA states, in relevant part:
[N]otwithstanding any power of the court, unless the
Oversight Board consents or the plan so provides, the
court may not, by any stay, order, or decree, in the
case or otherwise, interfere with -- (1) any of the
political or governmental powers of the debtor; (2) any
of the property or revenues of the debtor; or (3) the
use or enjoyment by the debtor of any income-producing
property.
48 U.S.C. § 2165. The provision mimics, in all pertinent respects,
the analogous section 904 of the municipal-bankruptcy code. See
11 U.S.C. § 904.
Ambac seeks declaratory and injunctive relief that would
require the Title III court to directly interfere with the
"political or governmental powers" and "property or revenues" of
the Commonwealth and HTA, at least as to those HTA revenues that
have yet to be transferred to the fiscal agent and remain in the
possession of the Commonwealth. Specifically, Ambac requests
injunctive relief that would compel the Commonwealth's remittance
of toll revenues, vehicles fees, and excise taxes to HTA and then
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to the Bank of New York Mellon for payment to bondholders. Ambac
hopes to achieve much the same end by obtaining a declaration that
the Commonwealth's continued divergence of these funds pursuant to
the Moratorium Laws and Orders and the Fiscal Plan is
unconstitutional, preempted under section 303 of PROMESA, and in
violation of sections 922(d) and 928(a) of the municipal-
bankruptcy code (as incorporated into PROMESA via 48 U.S.C.
§ 2161(a)).
In Financial Oversight and Management Board for Puerto
Rico v. Ad Hoc Group of Puerto Rico Electric Power Authority
Bondholders, we held that although section 305 prohibits a
Title III court from "directly interfering with the listed powers
and properties of [a Commonwealth agency]," it does not bar a
Title III court from granting a reprieve from the automatic stay
under 11 U.S.C. § 362 to allow another court, pursuant to
Commonwealth law, to place a Commonwealth entity into
receivership. PREPA, 899 F.3d 13, 19 (1st Cir. 2018). In doing
so, we recognized that granting such relief would require a
Title III court to "merely stand[] aside" to "allow[] the processes
of . . . territorial law to operate in normal course." Id. at 21.
Here, by contrast, Ambac's requested relief would require the Title
III court itself to direct the Commonwealth's use of its revenues
and property in a manner that contravenes the expressed will of
the Commonwealth legislature, the Governor of Puerto Rico, and the
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Oversight Board. On its face, the text of section 305 bars the
Title III court from granting Ambac such relief absent consent
from the Oversight Board or unless the Fiscal Plan so provides.
See 48 U.S.C. § 2165.
This conclusion accords with our recent decision in
Aurelius Capital Master, Ltd. v. Puerto Rico, in which we held
that section 305 bars the Title III court from preventing the
Commonwealth from using certain Commonwealth revenues for the
payment of general-obligation debt. 919 F.3d 638, 648–49 (1st
Cir. 2019). It also accords with how courts have interpreted the
analogous section 904 of the municipal-bankruptcy code. See Lyda
v. City of Detroit (In re City of Detroit), 841 F.3d 684, 696 (6th
Cir. 2016) (holding that section 904 prohibits the court
overseeing Detroit's bankruptcy from awarding residents an
injunction that would have restored water service in the city);
Ass'n of Retired Emps. of Stockton v. City of Stockton (In re City
of Stockton), 478 B.R. 8, 20–22 (Bankr. E.D. Cal. 2012) (concluding
that section 904 precludes enjoining the city from implementing a
reduction in retiree health benefits); see generally 6 Collier on
Bankruptcy ¶ 904.01 (Richard Levin & Henry J. Sommer eds. 16th ed.
2018) [hereinafter Collier] ("[T]he prohibition of this section is
absolute. . . . The question is . . . whether the order improperly
interferes with the political or governmental affairs or property
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of the debtor. If it does, then no matter what authority is used
to support it, the order runs afoul of section 904.").
The context in which Congress passed section 904
provides further credence to our reading of section 305. In Ashton
v. Cameron County Water Improvement District, the Supreme Court
struck down a predecessor to the modern municipal-bankruptcy
statute, reasoning that it allowed a federal bankruptcy court to
impermissibly intrude upon the sovereignty of states and their
subdivisions. 298 U.S. 513, 531 (1936) ("If obligations of states
or their political subdivisions may be subjected to the
interference here attempted, they are no longer free to manage
their own affairs . . . ."). By including section 904 (and its
corollary, 11 U.S.C. § 903, which explicitly reserves power to the
states to control municipalities within their territories),
Congress intended to give the bankruptcy courts "only enough
jurisdiction to provide meaningful assistance to municipalities
that require it, not to address the policy matters that such
municipalities control." Lyda, 841 F.3d at 695 (quoting In re
Addison Cmty. Hosp. Auth., 175 B.R. 646, 649 (Bankr. E.D. Mich.
1994)); see also 6 Collier ¶ 904.LH.
Notwithstanding the foregoing, Ambac offers four reasons
why section 305 should not preclude us from affording it the
injunctive and declaratory relief that it seeks in this case.
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First, Ambac argues that nothing in section 305
addresses pledged-special-revenue bonds in Title III proceedings.
Accordingly, it reasons, sections 922(d) and 928(a) control the
treatment and disposition of pledged special revenues in Title III
bankruptcy cases, and section 305 therefore poses no bar to the
Title III court's ability to grant its requested relief.
Section 922(d) provides that "[n]otwithstanding
section 362 of this title and subsection (a) of this section, a
petition filed under this chapter does not operate as a stay of
application of pledged special revenues . . . to payment of
indebtedness secured by such revenues." 11 U.S.C. § 922(d). And
section 928(a) states: "Notwithstanding section 552(a) of this
title . . . , special revenues acquired by the debtor after the
commencement of the case shall remain subject to any lien resulting
from any security agreement entered into by the debtor before the
commencement of the case." Id. § 928(a). It is true that
section 305, in contrast to these provisions, does not
specifically mention "pledged special revenues." But neither does
it explicitly reference any other type of municipal debt or
substantive form of interference with a debtor's political powers,
property, or revenues. Analogously, though a sign might simply
state "No Smoking Allowed," no one would reasonably construe such
a prohibition as permitting an individual to light up a cigar
merely because the sign makes no specific reference to rolled,
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tobacco-filled cartridges of the larger, unfiltered variety.
Rather, any reasonable reader would conclude that the broad
language fairly communicates a reach that plainly encompasses the
narrower application; likewise, Ambac's requested relief that
would direct the Commonwealth to turn over its property to
bondholders falls within the ambit of section 305's sweeping
language even if we assume that the funds in question are pledged
special revenues within the meaning of sections 922(d) and 928(a).
Of course, if section 305 directly conflicted with
sections 922(d) or 928(a) of the municipal bankruptcy code, one
might turn to "the ancient canon of interpretation . . . generalia
specialibus non derogant (the 'specific governs the general')."
Aurelius Inv., LLC v. Puerto Rico, 915 F.3d 838, 851 (1st Cir.
2019). Even then, though, section 305’s preface that its terms
apply "notwithstanding any power of the court" might well render
that rule of construction inapplicable. In any event, there is no
real conflict between the sections pertaining to pledged special
revenues and section 305. The former two provisions address the
relationship between the automatic stay and the application of
pledged special revenues to a debt. They say nothing at all about
the subject of section 305, i.e., whether the Title III court
itself has the power to require a debtor to turn over certain
revenues to a creditor. See Assured Guar. Corp. v. Fin. Oversight
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& Mgmt. Bd. for P.R. (In re Fin. Oversight & Mgmt. Bd. for P.R.),
919 F.3d 121, 131 n.12 (1st Cir. 2019).
Second, Ambac alleges that our interpretation of
section 305 would "effectively wipe out" sections 922(d) and
928(a) of the municipal bankruptcy code. It argues that these
provisions mandate the debtor's continued payment of special
revenues pursuant to the terms of the bondholder agreements and
that section 922(d) excepts from the automatic stay a creditor's
action seeking to enforce that mandate. Our recent decision in
Assured Guaranty rejected both of these contentions. See Assured
Guar. Corp., 919 F.3d at 127–32. Section 928(a) simply does what
it says: It orders that "special revenues acquired by the debtor
after the commencement of the case shall remain subject to any
lien resulting from any security agreement entered into by the
debtor before the commencement of the case." 11 U.S.C. § 928(a);
see also Assured Guar. Corp., 919 F.3d at 127–29. Section 922(d),
in turn, does provide an exception to the automatic stay, but not
as broadly as Ambac contends. The automatic stay encompasses a
large universe of creditor actions that might affect the debtor,
including not just lawsuits and enforcement actions, but also "any
post-petition collection activities against the debtor." S. Rep.
No. 100-506, at 11 (1988) (emphasis added); see also 11 U.S.C.
§ 362(a)(3) (barring "any act . . . to exercise control over
property of the [debtor]"); 11 U.S.C. § 362(a)(4) (prohibiting
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"any act to create, perfect, or enforce any lien against property
of the [debtor]"); 11 U.S.C. § 362(a)(6) (proscribing "any act to
collect, assess, or recover a claim against the debtor that arose
before the commencement of the [bankruptcy] case"). This broad
universe of stayed actions was understood to include a secured
creditor's application of collateral in its possession to the
debtor's outstanding debt. See, e.g., 3 Collier ¶ 362.03
("[I]nnocent conduct such as the cashing of checks received from
account debtors of accounts assigned as security may be a technical
violation [of section 362(a)(6)]."); id. ("[T]he stay applies to
secured creditors in possession of collateral and to collateral in
possession of a custodian."); see also S. Rep. No. 100-506, at 11
("The automatic stay of Bankruptcy Code Section 362 is extremely
broad, preventing any post-petition collection activities against
the debtor, including application of the debtor's funds held by a
secured lender to secure indebtedness." (emphasis added));
Metromedia Fiber Network Servs. v. Lexent, Inc. (In re Metromedia
Fiber Network, Inc.), 290 B.R. 487, 493 (Bankr. S.D.N.Y. 2003); In
re Reed, 102 B.R. 243, 245 (Bankr. E.D. Okla. 1989). Congress in
section 922(d) eliminated any possibility that the stay would
prevent the "application of pledged special revenues . . . to
payment of indebtedness." 11 U.S.C. § 922(d). But nothing in
that language suggests that Congress also excepted the plethora of
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other actions to which the automatic stay applies, most obviously
and notably suits to compel payment.
Ambac next alleges that section 305 does not prevent the
Title III court from granting its requested injunctive and
declaratory relief because the Oversight Board consented to such
interference by initiating Title III bankruptcy proceedings. But
in PREPA we rejected the argument that the mere filing of a
Title III petition might constitute such consent, reasoning that
to rule otherwise would be to "render section 305 a nullity."
PREPA, 899 F.3d at 19. We see no principled reason to reach a
different conclusion just because the proposed interference in
this case may involve pledged special revenues.
Finally, Ambac argues that its requested declaratory
relief is not actually coercive and, thus, would not impermissibly
interfere with the governmental affairs or property of HTA and the
Commonwealth. However, we declined to endorse this argument in
another recent PROMESA case, see Aurelius Capital Masters, Ltd.,
919 F.3d at 648, as did the Sixth Circuit in the municipal-
bankruptcy setting, see Lyda, 841 F.3d at 696 ("Preliminary or
permanent injunctions directing [the City] to stop terminations or
to provide water service . . . necessarily interfere[] . . . . A
declaration that [the City's] practices are illegal or
unconstitutional does the same." (citation omitted) (internal
quotation marks omitted)).
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At oral argument, counsel for Ambac also raised the
possibility that our interpretation of section 305 would raise due
process concerns because Ambac would be left without a venue in
which to bring its constitutional claims. But nothing in our
holding today suggests that Ambac cannot seek traditional stay
relief pursuant to 11 U.S.C. § 362 and raise its constitutional
and statutory arguments in a separate action. As we explained in
PREPA, section 305 "only bar[s] the Title III court itself from
directly interfering with the debtor's powers or property." 899
F.3d at 21. It does not, however, impose any such restraint on
another court.
Accordingly, we hold that the Title III court lacks the
authority to grant the declaratory and injunctive relief that Ambac
seeks in this case.4
III.
For the foregoing reasons, the judgment is affirmed.
4 In its First Amended Complaint, Ambac alleges that the Bank
of New York Mellon has not applied approximately $69 million in
funds that it is holding in trust for HTA bondholders, citing
AAFAF's letter directing it to retain these funds. And in one
cursory footnote in its brief, Ambac suggests that section 305
might not bar the Title III court from ordering the disbursement
of pledged special revenues that are already in the hands of the
fiscal agent. Ambac, however, does nothing further to develop
this argument, so we treat it as waived and we do not consider it
in this appeal. See United States v. Zannino, 895 F.2d 1, 17 (1st
Cir. 1990) ("[I]ssues adverted to in a perfunctory manner,
unaccompanied by some effort at developed argumentation, are
deemed waived.").
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