          United States Court of Appeals
                     For the First Circuit

No. 18-1463

  IN RE: THE FINANCIAL OVERSIGHT AND MANAGEMENT BOARD FOR PUERTO
 RICO, as representative of the Commonwealth of Puerto Rico; THE
   FINANCIAL OVERSIGHT AND MANAGEMENT BOARD FOR PUERTO RICO, as
       representative for the Puerto Rico Sales Tax Financing
      Corporation, a/k/a Cofina, Depository Trust Company; THE
   FINANCIAL OVERSIGHT AND MANAGEMENT BOARD FOR PUERTO RICO, as
  representative for the Puerto Rico Highways and Transportation
    Authority; THE FINANCIAL OVERSIGHT AND MANAGEMENT BOARD FOR
    PUERTO RICO, as representative for the Puerto Rico Electric
                      Power Authority (PREPA),

                            Debtors.



 SAMUEL GRACIA-GRACIA, individually and as representative of the
certified class; JORGE PLARD, individually and as representative
                     of the certified class,

                      Movants, Appellants,

                               v.

 FINANCIAL OVERSIGHT AND MANAGEMENT BOARD, as representative of
                the Commonwealth of Puerto Rico,

                        Debtor, Appellee,

   PUERTO RICO SALES TAX FINANCING CORPORATION, a/k/a Cofina;
 PUERTO RICO HIGHWAYS AND TRANSPORTATION AUTHORITY; PUERTO RICO
                ELECTRIC POWER AUTHORITY (PREPA),

                            Debtors.


          APPEAL FROM THE UNITED STATES DISTRICT COURT
                 FOR THE DISTRICT OF PUERTO RICO
           [Hon. Laura Taylor Swain, U.S. District Judge*]


                                Before

                    Torruella, Lynch, and Kayatta,
                            Circuit Judges.


     Antonio J. Amadeo Murga for appellants.
     Ehud Barak, with whom Timothy W. Mungovan, John E. Roberts,
Martin J. Bienenstock, Stephen L. Ratner, Mark D. Harris, Jeffrey
W. Levitan, and Proskauer Rose LLP were on brief, for debtor-
appellees.


                          September 25, 2019




     *Of   the Southern District of New York, sitting by designation.
             KAYATTA, Circuit Judge.      The plaintiffs in this case are

motor-vehicle owners and operators who paid duplicate premiums to

the    Commonwealth    of     Puerto    Rico     in     accordance    with      the

Commonwealth's compulsory automobile-insurance law, P.R. Laws Ann.

tit. 26, § 8053. The plaintiffs have waged a decades-long campaign

to retrieve the funds that they overpaid to the Commonwealth.

After we issued several opinions favorable to the plaintiffs'

claims, the parties eventually entered into a settlement agreement

in which the Commonwealth agreed to establish a notice and claim-

resolution process for motorists who paid duplicate premiums from

1998 to 2010.      Shortly thereafter, the Financial Oversight and

Management     Board   for    Puerto   Rico    initiated     Title III        debt-

adjustment proceedings on behalf of the Commonwealth pursuant to

the Puerto Rico Oversight, Management, and Economic Stability Act

(PROMESA), 48 U.S.C. §§ 2101–2241, which triggered an automatic

stay   of    collection     actions    against    the    Commonwealth.          The

Commonwealth,     citing     the   automatic      stay,     then     halted     its

implementation of the settlement agreement's notice and claim-

resolution process.         Never relenting, the plaintiffs petitioned

the Title III court for relief from the automatic stay to allow

them to bring an enforcement action against the Commonwealth in a

separate proceeding.         The Title III court largely denied that

petition.    We now affirm in part and vacate in part that decision.
                                            I.

             Approved in December 1995, Puerto Rico's Compulsory

Motor Vehicle Liability Act ("Law 253") requires all motorists in

Puerto Rico to obtain liability insurance either through the

Commonwealth or through a private insurer. P.R. Laws Ann. tit. 26,

§ 8053.      Though the Commonwealth adopted procedures to enable

motorists who opted for private insurance to avoid paying the

Commonwealth premiums, many of those motorists nevertheless paid

annual premiums to the Commonwealth.                   García-Rubiera v. Fortuño

(García-Rubiera II),         665     F.3d    261,      264–65    (1st        Cir.    2011).

Pursuant    to    Law 253,     the    Puerto       Rico      Secretary       of     Treasury

transfers     those    premiums       (referred         to     here     as     "duplicate

premiums")       to   the    Compulsory          Liability      Joint        Underwriting

Association of Puerto Rico (JUA).                  See P.R. Laws Ann. tit. 26,

§ 8055(c).       In accordance with the general scheme that Law 253

initially established, the JUA kept those duplicate premiums that

it received from the Secretary in a separate "Reserve" account,

where they were subject to reimbursement upon request by the

motorists who had paid the duplicate premiums.                        P.R. Laws Ann.

tit. 26, § 8055(j); García-Rubiera II, 665 F.3d at 266.                                And,

pursuant to Puerto Rico's default general-insurance law, unclaimed

duplicate    premiums       escheated       to   the   Commonwealth          after    seven

years.     García-Rubiera v. Calderón (García-Rubiera I), 570 F.3d

443, 449 (1st Cir. 2009).
            In 2002, the Puerto Rico legislature passed Law 230,

which modified this general scheme in a few notable ways.              First,

Law 230    directed   the    JUA    to    transfer   accumulated    duplicate

premiums from the Reserve account to the Secretary of Treasury

every two years.        P.R. Laws Ann. tit. 26, § 8055(j).            Second,

Law 230 provided that the Secretary of Treasury will "retain the

funds transferred by the [JUA] in its fiduciary capacity for a

five (5)-year term."        Id.     Once that five-year term "elapse[s]

without the consumer claiming the retained funds, said funds [will]

become property of the Government of Puerto Rico and [will] be

transferred to the General Fund of the State's Treasury."              Id.

            Following     Law     230's   passage,    the   JUA    transferred

$73 million from the Reserve account to the Secretary of Treasury.

After the Commonwealth used a large portion of those funds to

balance its budget, a class of motorists who had paid duplicate

premiums   filed   suit     in    district   court,    asserting    that     the

Commonwealth's transfer of funds from the Reserve account to the

Secretary of Treasury amounted to a violation of the Takings Clause

and was executed without the notice and process required by the

Due Process Clause.         García-Rubiera I, 570 F.3d at 450.             In a

series of opinions, this court held that those plaintiffs had a

property interest in these duplicate premiums for purposes of their

procedural Due Process Clause claim, id. at 457, and instructed

the Commonwealth "to give individual notice to insureds owed
reimbursement to the maximum extent feasible," García-Rubiera II,

665 F.3d at 276.

            Not satisfied with the Commonwealth's initial efforts to

notify potential claimants on remand, a subsequent panel of this

court ordered in 2013 that the Commonwealth afford plaintiffs at

least one year to file reimbursement claims.        See García-Rubiera

v. Fortuño (García-Rubiera III), 727 F.3d 102, 105, 110 (1st Cir.

2013).    "In the meantime," we added, "no duplicate premiums shall

escheat to the Commonwealth until it has established and complied

with a reimbursement procedure which meets the basic requirements

of constitutional due process."       Id. at 105.     Important to the

immediate appeal, this latter injunction on further escheatment to

the   Commonwealth    effectively   created   two   separate   pools   of

duplicate premiums.    Those funds that had not yet escheated to the

Commonwealth, i.e., funds the JUA received during or after 2006

and transferred to the Secretary of Treasury after July 2008,

remain in a segregated account.1     These funds -- referred to here

as the "segregated funds" -- amounted to roughly $76.1 million as

of March 2018.     All other funds, the "non-segregated funds," had

previously escheated to the Commonwealth and had already been

intermixed with the general Commonwealth coffers.



      1The record does not indicate the exact dates of receipt and
transfer in 2006 and 2008 that correspond with the funds that
remain in the segregated account.
          In 2016, the parties entered into a settlement agreement

whereby the Commonwealth agreed to (1) establish a notice and

claim-resolution process for motorists who paid duplicate premiums

from   1998    to   2010,   (2) refund   claimants   who   demonstrate

entitlement to reimbursement, and (3) pay, out of the funds due to

the motorists, attorneys' fees amounting to twenty percent of the

total reimbursement claims paid under the settlement.       Later that

year, Congress passed PROMESA and the Commonwealth made an initial

installment payment to the class attorneys.        And on May 3, 2017,

the Financial Oversight and Management Board for Puerto Rico

initiated Title III debt-adjustment proceedings on behalf of the

Commonwealth, triggering an automatic stay of collection actions

against the Commonwealth.       See 11 U.S.C. § 362(a); 48 U.S.C.

§ 2161(a) (incorporating 11 U.S.C. § 362 into PROMESA).              The

Commonwealth    subsequently   halted    its   implementation   of   the

reimbursement procedures set forth in the settlement agreement and

stopped payments to the plaintiffs' attorneys.

          In February 2018, the plaintiffs filed a motion in the

Title III debt-adjustment proceeding, seeking relief from the

automatic stay to allow them to enforce the terms of the settlement

agreement in a separate action.     The Title III court denied most

of the plaintiffs' requested relief but lifted the stay "solely to

the extent of permitting implementation of the notice and insurance

premium claim submission and review process."         Memorandum Order
Granting in Part and Denying in Part Motion Requesting Relief from

Stay at 8, No. 17 BK 3283-LTS (D.P.R. Apr. 6, 2018) [hereinafter

Order Denying Stay Relief].      In other words, the relief ordered by

the Title III court permits the plaintiffs' claims to be processed

(and also presumably allows the plaintiffs to pursue a separate

action to enforce the implementation and execution of that claims-

resolution process), but it does not allow the plaintiffs to

actually obtain reimbursement from the Commonwealth.           This appeal

followed.

                                   II.

                                       A.

              As the law stands in seven circuits, there would be no

question that we have appellate jurisdiction over an appeal like

this one because denials of motions for relief from an automatic

stay   are    categorically   deemed    final   and   appealable   in   those

circuits.      See Pinpoint IT Servs., LLC v. Rivera (In re Atlas IT

Export Corp.), 761 F.3d 177, 182 n.8 (1st Cir. 2014) (collecting

cases).      In this circuit though, we need do some more work because

our decision in In re Atlas rejected that categorical approach,

requiring us "to scout for finality indicators, like whether the

disputed order conclusively decided a discrete, fully-developed

issue -- an order that, at the time of appeal, will not be changed

or be mooted and is not reviewable elsewhere."            Id. at 184.     We

find plenty of such indicators.         Unlike in In re Atlas, there is
no suggestion here that "the bankruptcy court will get to decide

the   stay-relief   question    again . . .    on   a   better-developed

record."    Id. at 186.        To the contrary, confronted with an

extraordinary docket and an equally extraordinary workload, the

Title III court appears to have no intention to reconsider the

plaintiffs' denied motion for relief from stay, instead relegating

the resolution of their claims to the "debt adjustment phases of

the Title III proceeding." Order Denying Stay Relief, supra, at 8.

Nor is any other court in a position to resolve the parties'

dispute.   We are therefore most comfortable concluding that we

have appellate jurisdiction pursuant to 28 U.S.C. § 1291.           See

Peaje Invs. LLC v. García-Padilla, 845 F.3d 505, 511 (1st Cir.

2017) (finding appellate jurisdiction from a denial of a motion

for stay relief when the denial "rejected the Movants' substantive

arguments, holding that their interests in the collateral were

adequately protected," and "there was nothing left for the district

court to do").

                                   B.

           11 U.S.C. § 362(d)(1) provides that the Title III court

"shall grant relief from the [automatic] stay . . . for cause,

including the lack of adequate protection of an interest in

property of [a] party in interest."           We review the Title III

court's decision to deny a motion for relief from the automatic

stay for abuse of discretion.      See Fields Station LLC v. Capitol
Food Corp. of Fields Corner (In re Capitol Food Corp. of Fields

Corner), 490 F.3d 21, 23 (1st Cir. 2007).             That court abuses its

discretion    "if   it     ignores   'a    material    factor    deserving   of

significant weight,' relies upon 'an improper factor' or makes 'a

serious mistake in weighing proper factors.'"                 In re Whispering

Pines Estates, Inc., 369 B.R. 752, 757 (B.A.P. 1st Cir. 2007)

(quoting Bright v. Wash. Mut. Bank (In re Bright), 338 B.R. 530,

534 (1st Cir. B.A.P. 2006)).

             "Lack of adequate protection is the most common basis

for finding cause to grant relief."              3 Collier on Bankruptcy

¶ 362.07 (Richard Levin & Henry J. Sommer eds., 16th ed. 2018)

[hereinafter Collier]. But it is not the only reason a court might

grant such relief.        See id. ("Use of the word 'cause' suggests an

intention that the bases for relief from the stay should be broader

than merely lack of adequate protection.").              We have previously

observed that the factors the Second Circuit laid out in Sonnax

Industries    v.    Tri    Components     Products    Corp.    (In   re   Sonnax

Industries), 907 F.2d 1280, 1286 (2d Cir. 1990), "provide a helpful

framework" for determining whether stay relief should otherwise be

granted "for cause."        See Fin. Oversight & Mgmt. Bd. for P.R. v.

Ad Hoc Grp. of PREPA Bondholders (In re PREPA), 899 F.3d 13, 23

(1st Cir. 2018).     These factors are:

     (1) whether relief would result in a partial or complete
     resolution of the issues; (2) lack of any connection
     with or interference with the bankruptcy case;
     (3) whether the other proceeding involves the debtor as
     a fiduciary; (4) whether a specialized tribunal with the
     necessary expertise has been established to hear the
     cause of action; (5) whether the debtor's insurer has
     assumed   full   responsibility    for   defending   it;
     (6) whether the action primarily involves third parties;
     (7) whether litigation in another forum would prejudice
     the interests of other creditors; (8) whether the
     judgment claim arising from the other action is subject
     to equitable subordination; (9) whether movant's success
     in the other proceeding would result in a judicial lien
     avoidable by the debtor; (10) the interests of judicial
     economy and the expeditious and economical resolution of
     litigation; (11) whether the parties are ready for trial
     in the other proceeding; and (12) impact of the stay on
     the parties and the balance of harms.

In re Sonnax Indus., 907 F.2d at 1286.

            Initially,   the   moving   party    has    the   burden   of

establishing prima facie eligibility for stay relief.         See Mazzeo

v. Lenhart (In re Mazzeo), 167 F.3d 139, 142 (2d Cir. 1999).           "A

prima facie case requires a showing by the movant of 'a factual

and legal right to the relief that it seeks.'"         3 Collier, supra,

¶ 362.10 (italics omitted) (quoting In re Elmira Litho, Inc., 174

B.R. 892, 902 (Bankr. S.D.N.Y. 1994)).          But the debtor has the

ultimate burden of persuasion on "all issues other than 'the

debtor's equity in property.'"     In re Sonnax Indus., 907 F.2d at

1285 (quoting 11 U.S.C. § 362(g)(1)); see generally 11 U.S.C.

§ 362(g).    With those respective burdens in mind, we turn to the

particulars of the request for stay relief in this case.
                                        C.

              Plaintiffs' claim to relief rests on their contention

that the funds they seek are their own and are being held by the

Commonwealth only as a trustee that lacks any equitable interest

in the property.         In short, plaintiffs argue not that they are

creditors who are owed damages to be paid from the Commonwealth's

coffers; rather, they argue that they are seeking the rightful

return of their own assets.

              In ruling on the plaintiffs' request to be allowed to

retrieve their funds in a separate action, the Title III court

chose   not    to   determine,    in    the   first   instance,   whether     the

Commonwealth in fact holds assets of the plaintiffs in which the

Commonwealth has no equitable interest.               Instead, the district

court went directly to weighing the In re Sonnax factors. It found

that    (1) implementation       of    the    reimbursement    aspect    of   the

parties' stipulated agreement was not yet ripe for resolution,

(2) resolving the class members' reimbursement claims "raise[d]

the    prospect     of   preferential    treatment    over    other     similarly

situated creditors," and (3) considerations of judicial economy

weighed in favor of resolving the payment questions during the

plan-confirmation phase of the Title III case.                Accordingly, the

Title III court declined to grant the plaintiffs' requested stay

relief.
             On appeal, the plaintiffs argue that the Title III court

abused its discretion by not first addressing their claim that the

contested funds are their property and are merely being held in

trust by the Commonwealth.        Had this issue been resolved in the

first instance, they maintain, the Title III court would have

concluded that the Commonwealth holds only legal title to the

duplicate premiums and that the In re Sonnax factors, when viewed

in light of this fact, would have weighed in favor of lifting the

automatic stay.

             We agree with the plaintiffs that, in order to properly

weigh the In re Sonnax factors, the Title III court first needed

to make at least a preliminary determination of the parties'

respective property interests in the disputed funds.        The parties'

legal and equitable interests in the duplicate premiums were

certainly material to the decision to grant or deny the request

for stay relief.       "[W]hether the other proceeding involves the

debtor as a fiduciary" is one of the relevant In re Sonnax factors

that   courts   look   to   in   determining   whether   stay   relief   is

warranted.    See 907 F.2d at 1286.    And in this case, an assessment

of a number of the other In re Sonnax factors would likely turn on

the parties' respective property interests in the disputed funds.

These include whether stay relief would pose an obstacle to the

Title III debt-adjustment process, whether prejudice to other

Commonwealth creditors would ensue from granting relief, and the
balance of harms amongst the parties (factors two, seven, and

twelve, respectively).       If the plaintiffs are correct that the

Commonwealth   is   merely   retaining       their   funds    in   a   fiduciary

capacity as a trustee, those factors would all seem to weigh in

their favor.

            Many courts have decided to grant stay relief "for cause"

after first finding that the debtor has only a legal, rather than

equitable, interest in the property at issue.                See, e.g., In re

Williams,   144   F.3d   544,   550   (7th    Cir.   1998)    (upholding    the

bankruptcy court's modification of the automatic stay to permit an

eviction action to proceed upon determining that the debtor no

longer had any interest in the lease prior to her bankruptcy

petition); In re Zubenko, 528 B.R. 784, 790 (Bankr. E.D. Cal. 2015)

(finding "cause exist[ed] under § 362(d)(1) to . . . terminate the

automatic stay" when the estate lacked an equitable interest in

the property); In re Madison, 438 B.R. 866, 870 (Bankr. D.S.C.

2010) ("Where debtor has been divested of all but bare legal title

through a foreclosure sale, cause exists to grant relief from the

automatic stay to permit Creditor to conclude any act remaining in

the sale process and take possession of the property."); In re

Brown, 75 B.R. 1009, 1012 (Bankr. E.D. Pa. 1987) (finding "cause"

to lift the stay to allow a creditor to "obtain a deed and,

ultimately, possession" of property when the debtor retained only

legal title to said property).         And though the bankruptcy code
does not comprehensively define what grounds constitute "cause" to

lift the automatic stay, the legislative history accompanying the

1978 amendments to the bankruptcy code indicates that Congress

thought stay relief would be warranted when the debtor retains no

equitable stake in the property.                 See S. Rep. No. 95-989, at 52

(1978)   ("Generally,       proceedings          in    which       the    debtor    is   a

fiduciary . . .      need    not     be     stayed       because         they    bear    no

relationship to the purpose of the automatic stay, which is

protection of the debtor and his estate from his creditors.");

H.R. Rep. No. 95-595, at 343–44 (1977) (same).

             The Commonwealth tries to resist this conclusion by

pointing out that Congress did not incorporate section 541(d) of

the   bankruptcy    code    into    PROMESA.            See   48    U.S.C.      § 2161(a)

(incorporating various provisions of the bankruptcy code into

Title III of PROMESA).            Therefore, argues the Commonwealth, we

should   pay   no   attention      to     case    law    or    legislative         history

pertaining to relief from the automatic stay under the Code,

especially     if   the    case    law     or    history       happens      to     mention

section 541(d).     This argument presents nothing but a red herring.

We explain why.

             Section 541(d) does not address -- at all -- the subject

of relief from the automatic stay.                    What it does do is define

"property of the estate," stating as follows:
      Property in which the debtor holds, as of the
      commencement of the case, only legal title and not an
      equitable interest . . . becomes property of the
      estate . . . only to the extent of the debtor's legal
      title to such property, but not to the extent of any
      equitable interest in such property that the debtor does
      not hold.

11 U.S.C. § 541(d).      That provision is important in non-PROMESA

and   non-municipal    bankruptcy       cases    because      it    defines      what

property     constitutes         "the       estate."               That     initial

compartmentalization,      in    turn,      delineates      the    reach    of   the

automatic   stay    because     the   subsections      of   the     automatic-stay

provision, id. § 362(a), variously apply to "property of the

estate" or, more broadly, to "property of the debtor."                      See id.

§ 362(a).    Were this a typical bankruptcy case rather than a

Title III   proceeding,         the     plaintiffs      might       have    invoked

section 541(d) to argue that the duplicate premiums to which they

assert ownership are not a part of the estate and, as a result,

the automatic stay does not even apply to their attempts to recoup

those funds.     But this argument is unavailable to the plaintiffs

because there is no "estate" in the PROMESA context. See 48 U.S.C.

§ 2161(a) (not incorporating 11 U.S.C. § 541).                  Instead, PROMESA

and the municipal bankruptcy code instruct that we replace all

instances   of     "property    of    the    estate"     that      appear   in    the

incorporated provisions of the bankruptcy code with "property of

the debtor."     See id. § 902(1).
             The practical ramification of the foregoing is that the

reach of the automatic stay is broader in the PROMESA and municipal

bankruptcy contexts than it is in the run-of-the-mill bankruptcy

case.      See     Collier,    supra,       ¶ 901.04    ("The   applicability   of

section 362 to municipal debt adjustment cases is a continuation

of prior law.       However, the protection afforded by section 362 is

substantially       broader    for    the    debtor . . . .").        The   textual

ramification is that section 541(d) has no role to play under

PROMESA because the concept of "the estate" has no role under

PROMESA.

             So,    the     fact     that    PROMESA     does   not   incorporate

section 541 of the bankruptcy code has no relevance of any kind to

the immediate dispute about whether plaintiffs should receive

relief from the otherwise admittedly applicable automatic stay.

For the same reason, any passing reference to section 541 of the

bankruptcy code in the foregoing case law does not sap those cases

of   their    precedential         relevance     to    determining    whether   an

admittedly applicable stay should be lifted.

             Nor     does     Congress's       choice     to    not   incorporate

section 541 into PROMESA diminish the relevance of the parties'

respective property interests to the plaintiffs' requested stay

relief.    That Congress thought that stay relief should be granted

under PROMESA upon a showing that the debtor lacks equity in

disputed property is confirmed by Congress's express decision to
incorporate    subsection 362(d)(2)     of   the     bankruptcy    code   into

PROMESA.   See 48 U.S.C. § 2161(a) (incorporating 11 U.S.C. § 362).

That provision provides that stay relief shall be granted "with

respect to a stay of an act against property" if "the debtor does

not have an equity in such property" and "such property is not

necessary to an effective reorganization."           11 U.S.C. § 362(d)(2).

Inexplicably, the plaintiffs opted to seek stay relief by showing

"cause," id. § 362(d)(1), rather than by pursuing the more obvious

path for relief laid out in subsection 362(d)(2).             The former was

likely the more arduous course for the plaintiffs to choose in

this case:     Not only must the plaintiffs show the Commonwealth's

absence of equity in the duplicate premiums and a "lack of . . .

interference    with      the   bankruptcy   case"     --    the   functional

equivalent     of   the     prerequisites    for      stay    relief      under

subsection 362(d)(2) -- they must also show that the other relevant

In re Sonnax factors, such as "whether relief would result in a

partial or complete resolution of the issues," prejudice to other

creditors, the interests of judicial economy, "whether the parties

are ready for trial in the other proceeding," and the balance of

harms amongst the parties, weigh in their favor.               In re Sonnax

Indus., 907 F.2d at 1286.        While we might question the wisdom of

this dubious strategic choice, it is not an attempt to make an end

run around the requirements set forth in subsection 362(d)(1), and

it therefore provides no basis to deny the plaintiffs' request for
stay relief so long as the In re Sonnax factors weigh in their

favor.2

               In short, the parties' respective property interests in

the    contested     funds   were   "material   factor[s]   deserving   of

significant weight" in deciding to grant or deny the requested

stay relief.       In re Whispering Pines Estates, Inc., 369 B.R. at

757.       It follows that the Title III court should not have declined

to consider this factor.            We therefore turn our attention to

ascertaining whether the Title III court's failure to make this



       2
       Neither the Commonwealth nor the Title III court addressed
the possibility that subsections 362(d)(1) and 362(d)(2) are
mutually exclusive provisions that require a movant asserting an
equitable right to property in the possession of a debtor to pursue
stay relief via subsection 362(d)(2), not subsection 362(d)(1).
But see, e.g., In re Behanna, 381 B.R. 631, 642 (Bankr. W.D. Pa.
2008) ("A party in interest . . . may seek relief from the
automatic stay on two alternative, but not mutually exclusive,
grounds."); In re Miller, 13 B.R. 110, 117 (Bankr. S.D. Ind. 1981)
("Section 362(d)(1) and Section 362(d)(2) each provide an
alternative basis for obtaining relief from the automatic
stay . . . .").     The legislative history accords with this
caselaw. See H.R. Rep. No. 95-595 ("Under section 362(d)(1) . . .
the court may terminate, annul, modify or condition the automatic
stay for cause, including lack of adequate protection of an
interest   in   property   of    a   secured   party. . . .   Under
section 362(d)(2) the court may alternatively terminate, annul,
modify, or condition the automatic stay for cause . . . .       The
court shall grant relief from the stay if there is no equity and
it is not necessary to an effective reorganization of the
debtor.").   We find it unnecessary to address this possibility
because it seems very unlikely both that the two provisions are
mutually exclusive and that the plaintiffs could not shift their
citation and reduce the scope of their argument on remand.       Be
that as it may, our opinion does not tie the district court's hands
on this point should it turn out to be more significant than we
expect.
initial determination could have made any difference to the court's

ultimate decision to grant or deny the plaintiffs' request for

stay relief.     We consider, separately, the non-segregated funds

and then the segregated funds.

                                       1.

            Despite not determining the parties' property interests

in   the   contested   funds,    the   Title III   court   did   not   err   in

declining to grant the entirety of the plaintiffs' requested stay

relief as to the non-segregated funds because the plaintiffs did

not make out a prima facie case for such relief.                 As we have

previously explained:

      In order to establish . . . a right as trust beneficiary,
      a claimant must make two showings: first, the claimant
      must prove the existence and legal source of a trust
      relationship; second, the claimant must identify the
      trust fund or property and, where the trust fund has
      been commingled with general property of the bankrupt,
      sufficiently trace the property or funds . . . .

Conn. Gen. Life Ins. Co. v. Universal Ins. Co., 838 F.2d 612, 618

(1st Cir. 1988) (emphasis added). To trace those intermixed funds,

we apply the "lowest intermediate balance rule," which requires us

to "follow the trust fund and decree restitution from an account

where the amount on deposit has at all times since the commingling

of the funds equaled or exceeded the amount of the trust fund."

Id. at 619 (citations omitted).         When "all the money is withdrawn,

the trust fund is treated as lost, even though later deposits are

made into the account."         Id.    If, however, only some but not all
of the money is withdrawn such that "the amount on deposit [is]

reduced below the amount of the trust fund . . ., the claimant is

entitled to the lowest intermediate balance in the account."           Id.3

          Because   the   plaintiffs   had   the   initial    burden    to

demonstrate a prima facie legal right to the duplicate premiums,

In re Mazzeo, 167 F.3d at 142, and because they premise that right

on their alleged status as the trust beneficiaries (and, therefore,

the true equitable owners) of those premiums, they needed to show

not only that a trust relationship exists as to the non-segregated

funds but also that those duplicate premiums are traceable.            The

plaintiffs, however, made no effort to demonstrate that the non-

segregated duplicate premiums could be traced despite the fact

that all parties acknowledge that those funds escheated to the

Commonwealth (whether that escheatment is void or not, we need not

decide) and were transferred to the Commonwealth to be used, along

with other funds, to pay general budget expenses.            See García-

Rubiera II, 665 F.3d at 268.      The plaintiffs, therefore, have

waived any ability to make a prima facie right of ownership in any

of the non-segregated funds, see United States v. Zannino, 895

F.2d 1, 17 (1st Cir. 1990), and for that reason, the Title III


     3Note, too, that other courts have applied a pro rata approach
to tracing funds "when one party is claiming assets that are
commingled with the assets of someone similarly situated."
Gulfstream Aerospace Corp. v. Calascibetta, 142 Fed. App'x 562,
566 (3d Cir. 2005).
court acted well within its discretion in declining to grant stay

relief as to this subset of funds.

                                           2.

             That    leaves      the   segregated   funds.     As    all   parties

acknowledged below, "approximately $76.1 million corresponding to

unclaimed funds from 2006 to present" are "segregated into a

separate account in the General Fund for accounting purposes."

Moreover,    as     proof   of    their    beneficial    entitlement     to   these

segregated    premiums      (limited       to   those   payments    of   duplicate

premiums that were made through 2010), the plaintiffs point to the

trust relationship established in Law 230, which requires the

Secretary of Treasury to hold duplicate premiums "in its fiduciary

capacity" prior to their escheatment to the Commonwealth.                     P.R.

Laws Ann. tit. 26, § 8055(j); see also García-Rubiera II, 665 F.3d

at 266 (explaining that the Secretary of Treasury holds duplicate

premiums "as trustee").           Therefore, members of the plaintiff class

who qualify for reimbursement from this subset of funds have made

a prima facie showing of traceability and the existence of a trust

relationship.       See Conn. Gen. Life Ins. Co., 838 F.2d at 618.

             On appeal, the Commonwealth attempts to parry that prima

facie   showing         with       a      three-sentence     assertion        that,

notwithstanding the prior opinions of this court and the terms of

Law 230, no trust relationship exists as to these funds in the

absence of a notarized "public deed."                   It is true that Puerto
Rico's Trust Law requires that trusts be recorded with the Special

Trust Registry "under penalty of nullity." P.R. Laws Ann. tit. 32,

§ 3351d.     Why this requirement would apply equally to a trust

relationship created by statute, the Commonwealth does not say.

See Cordova & Simonpietri v. Crown Am. Ins. Co., 12 P.R. Offic.

Trans. 1003, 1007 (P.R. 1982) (In Puerto Rico, "according to the

general rules of construction statutes, a special law governing a

specific matter prevails over a general law.")                At any rate, the

Commonwealth concedes that this is "an open question disputed by

the parties."      If so, then it remains for the Title III court to

consider    on    remand     in    preliminarily      deciding    whether     the

Commonwealth possesses any equity in the segregated funds.

            In its briefing and at oral argument, the Commonwealth

also   raised     the   possibility      that     other   "similarly   situated

prepetition creditors" might have overlapping claims to the same

pool of disputed funds to which the plaintiffs are now asserting

ownership in their motion for stay relief.                   The Commonwealth

maintains that this possibility warrants the denial of stay relief

so that such putative competing interests can be untangled at the

plan-confirmation       phase     with   all    interested   parties   present.

Whether    this   argument      concerns   both    the    segregated   and   non-

segregated funds, the Commonwealth does not make clear.                  In any

event, the Commonwealth points to no evidence that these putative

creditors exist, at least as to the segregated funds.              The Federal
Rules    of    Bankruptcy     Procedure,      which      apply   in     Title III

proceedings, see 48 U.S.C. § 2170, required the plaintiffs to serve

their motion for stay relief upon certain interested creditors and

"other   entities    as     the   court     may    direct,"   Fed.     R.   Bankr.

P. 4001(a)(1). No other interested creditor came forward to object

to the plaintiffs' motion.        And the Commonwealth made no argument

on appeal or below that the plaintiffs did not sufficiently alert

all appropriate parties, even though the Commonwealth had the

burden to do so.     See 11 U.S.C. § 362(g)(2).           On the record as it

now stands, then, we have no reason to believe that any creditor

with interests equal or senior to those of the plaintiffs was

deprived of the opportunity to assert a claim to the segregated

funds.

              Accordingly,   remand    is    warranted     for   the    Title III

court,   in    ordinary   course,     to    make    at   least   a    preliminary

determination of the parties' respective property interests in the

segregated funds, taking into consideration both the prima facie

showing made by the plaintiffs and the plaintiffs' ultimate burden

"on the issue of the debtor's equity" in the disputed funds, see

11 U.S.C. § 362(g)(1), and to reapply the In re Sonnax factors to

these funds in light of that preliminary determination, see Grella

v. Salem Five Cent Sav. Bank, 42 F.3d 26 (1st Cir. 1994) (holding

that "a hearing on a motion for relief from stay is merely a

summary proceeding of limited effect," requiring the bankruptcy
court to decide only "whether the party seeking relief has a

colorable claim to [the] property").4

                                    III.

              For the above-stated reasons, we affirm in part and

vacate   in    part   the   Title III   court's   partial   denial   of   the

plaintiffs' requested stay relief.         As to the segregated funds, we

remand to the Title III court for proceedings consistent with this

opinion.

              No costs are awarded.




     4  Section 362(e) of the bankruptcy code requires the
bankruptcy court to hold a preliminary hearing within thirty days
and to conclude and issue a final hearing and determination within
sixty days of a movant's request for stay relief absent "consent
of the parties in interest" or "compelling circumstances."      11
U.S.C. § 362(e)(1).   Those time limits will commence anew upon
issuance of the court's mandate corresponding with our opinion
today. We express no view on whether "compelling circumstances"
might warrant a continuance of a final determination on the
plaintiffs' motion for stay relief.
