As promised, find our updated listing of lawsuits HERE. We now believe there are at least 195 claims filed since the close of 2Q19 (versus Triple-S’s claim that only 48 lawsuits filed after 6/30/19 were in active litigation). To review the actual complaints we have thus far compiled, click HERE. Our complaint database is not exhaustive. Most of the complaints are in Spanish. The dockets containing “2019” in their titles will likely be of most interest as they tend to be commercial claims associated with the 2-year statute of limitations. Due to Puerto Rico law, these suits are not styled as one single class action suit, so the idea that all of these lawsuits are “immaterial” stretches the imagination and should not pass any reasonable ratings examination / financial audit given defense costs alone. Total claims against Propiedad that we have dug up (what we know is a non-exhaustive list) are now north of $930 million, giving additional credibility to our original reporting suggesting north of $1 billion in outstanding claims. We felt it was important to share actual complaints publicly.

It is a good time to revisit our reporting. First, we received push back about the a) existence of outstanding Maria claims 2-years after the hurricane, and b) the magnitude of said claims. Massive volumes of undisclosed litigation filed in recent weeks puts that debate to rest. Management went out of its way to hide the ball despite being well aware of the 2-year statute of limitations and well aware of the deluge of lawsuits. If the company believed these suits were unwarranted it would have been well served to get in front of the news. Instead, you first heard about these lawsuits from this blog.

Second, we have now received push back from shareholders who point to all of the cash on Triple-S’s balance sheet. Our response? The cash won’t belong to you. You can’t have it both ways – if you think the healthcare subsidiary survives P&C receivership (which we agree with as it is the point of holding company structures), then the cash trapped in that subsidiary will go along with the healthcare subsidiary as it is largely statutorily required cash. Some bulls appear to be mixing apples with oranges – the purpose of bankruptcy remote insurance structures is to protect surviving subsidiaries from the debts of the problem insurance subs, NOT to protect shareholders from contingent liabilities associated with management malfeasance. In other words, yes healthcare will continue on and not be dragged down by problems at P&C, but that says nothing about what happens to the equity claim that the parent company has on surviving entities such as the healthcare sub.

The only question in our minds is who will ultimately own the residual equity value associated with the healthcare business. That equity value should be used to cure the company’s potentially massive contingent liabilities – if the allegations in the lawsuits are accurate – namely, that Triple-S outright ignored claims or provided bogus paperwork to resolve claims – then the management company must be held accountable.

We note that Triple-S has not disclosed the existence of these lawsuits so we have no way to know what their position is on these lawsuits, however we surmise based on non-disclosure that the company denies the allegations in the lawsuits we mention above.

As you read the complaints, we ask you to put yourselves in the position of Triple-S policyholders who PAID THEIR PREMIUMS and received NOTHING from Triple-S. What will those plaintiffs think about Triple-S making $33 million of insurance payments to the Chairman’s hospital? Was Commissioner Rios aware of those payments?

So why do people own Triple-S today? It apparently all comes down to the stock being “cheap on book value” and the idea that all of that “trapped cash” will belong to GTS shareholders – despite management’s outrageous behavior over the past few months.

To the crowd thinking they will own the “book value”, read on:

  1. Triple-S management has repeatedly misled the investing public with respect to its handling of Maria claims – we believe management’s public statements – and particularly the September 24, 2019 press release – have opened the management company to substantial liability
  2. Triple-S management made an enormous insurance payment to the Chairman of the Board’s hospital while allegedly denying hundreds of millions of claims from third parties with improper or no basis – including other hospitals in desperate need
  3. Triple-S advertised the support of the management company as the #1 reason to buy Propiedad policies from the company
  4. Triple-S has been accused of utilizing political connections via Elias Sanchez in order to win the Vital contract, again opening the company up to substantial liability (note: Triple-S has denied this accusation)
  5. Almost all of the book value is not in the form of excess capital, but is instead regulatory trapped cash meant to support insurance operations and thereby in our view ultimately owned by insurance regulators and NOT by the management company
  6. Propiedad was already operating at the bare minimum capitalization levels prior to the Maria statute of limitations, and according to a healthcare insurance expert we spoke with, the healthcare sub required regulatory capital level is not at all an outlier when compared to mainland insurers
  7. We have reviewed litigation and spoken with providers in Puerto Rico and do not believe that the healthcare business is in fact the purported crown jewel that the market believes and will continue to report on our findings in due time

Perhaps most importantly – what will the political reaction in Puerto Rico be if Commissioner Rios allows Triple-S to walk away from its P&C policies with no consequences for its management company?

As an aside – when searching for these dockets make sure that you search by docket number and if that fails search by plaintiff. THIS website can be used for docket searches by keep in mind that the E-Filing system is plagued with issues (e.g. simple search by defendant will NOT return all Triple-S lawsuits and the Puerto Rican court system occasionally uses the same docket number twice making it crucially important that you search for cases using various identifiers).

The cash is not truly available to shareholders. And we think given the developments on the P&C side, any attempt to shift cash around right now in favor of shareholders will be fodder for all of the lawsuits relating to outstanding Maria claims.


The author is short shares of GTS (“the issuer”).  The author of this report also has derivatives positions in the issuer.  Use of this report is limited by the Terms of Use on  You should carefully review the Terms of Service prior to reading this report. All information for this article was derived from publicly available information. Investors are encouraged to conduct their own due diligence into these factors. This article represents the opinion of the author as of the date of this article. The information set forth in this article does not constitute a recommendation to buy or sell any security. This article contains certain “forward-looking statements,” which may be identified by the use of such words as “believe,” “expect,” “anticipate,” “should,” “planned,” “estimated,” “potential,” “outlook,” “forecast,” “plan” and other similar terms. All are subject to various factors, any or all of which could cause actual events to differ materially from projected events. This article is based upon information reasonably available to the author and obtained from sources the author believes to be reliable; however, such information and sources cannot be guaranteed as to their accuracy or completeness. This article reflects the author’s opinion at the time of publication. The author makes no representation as to the accuracy or completeness of the information set forth in this article and undertakes no duty to update its contents. The author may also cover his/her short position at any point in time without providing notice. The author may also transact in equity options of the issuer at any point in time without providing notice.  The author encourages all readers to do their own due diligence.