230126 ORD DENY RECONSIDERATION MOT ENFORCE VERSION JANUARY 26, 2023 1

UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF PUERTO RICO 

In re:

THE FINANCIAL OVERSIGHT AND 

MANAGEMENT BOARD FOR PUERTO RICO,

as representative of

THE COMMONWEALTH OF PUERTO RICO et al.,

Debtors.1

PROMESA

Title III

Case No. 17-BK-3283 (LTS)

(Jointly Administered)

In re:

THE FINANCIAL OVERSIGHT AND 

MANAGEMENT BOARD FOR PUERTO RICO, 

 as representative of 

THE EMPLOYEES RETIREMENT SYSTEM OF THE 

GOVERNMENT OF THE COMMONWEALTH OF 

PUERTO RICO,

 Debtor.

PROMESA

Title III

Case No. 17-BK-3566 (LTS)

ORDER DENYING MOTION FOR RECONSIDERATION UNDER BANKRUPTCY RULE 9023

 1

 The Debtors in these Title III Cases, along with each Debtor’s respective Title III case 

number and the last four (4) digits of each Debtor’s federal tax identification number, as 

applicable, are the (i) Commonwealth of Puerto Rico (the “Commonwealth”) 

(Bankruptcy Case No. 17-BK-3283-LTS) (Last Four Digits of Federal Tax ID: 3481); 

(ii) Puerto Rico Sales Tax Financing Corporation (“COFINA”) (Bankruptcy Case No. 17-

BK-3284-LTS) (Last Four Digits of Federal Tax ID: 8474); (iii) Puerto Rico Highways 

and Transportation Authority (“HTA”) (Bankruptcy Case No. 17-BK-3567-LTS) (Last 

Four Digits of Federal Tax ID: 3808); (iv) Employees Retirement System of the 

Government of the Commonwealth of Puerto Rico (“ERS”) (Bankruptcy Case No. 17-

BK-3566-LTS) (Last Four Digits of Federal Tax ID: 9686); (v) Puerto Rico Electric 

Power Authority (“PREPA”) (Bankruptcy Case No. 17-BK-4780-LTS) (Last Four Digits 

of Federal Tax ID: 3747); and (vi) Puerto Rico Public Buildings Authority (“PBA”) 

(Bankruptcy Case No. 19-BK-5523-LTS) (Last Four Digits of Federal Tax ID: 3801) 

(Title III case numbers are listed as Bankruptcy Case numbers due to software 

limitations).

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The Court has received and reviewed the Motion for Reconsideration Under 

Bankruptcy Rule 9023 (Docket Entry No. 23058 in Case No. 17-3283)2 (the “Reconsideration 

Motion”), filed by Pedro José Nazario Serrano, Joel Rivera Morales, María de Lourdes Gómez 

Pérez, Héctor Cruz Villanueva, Lourdes Rodríguez, and Luis M. Jordán Rivera, and Juanita Sosa 

Pérez (collectively, the “Movants”). The Motion seeks reconsideration of this Court’s 

Memorandum Opinion and Order Granting the Motion to Enforce the Plan (Docket Entry No. 

22927 in Case No. 17-3283; Docket Entry No. 1386 in Case No. 17-3566) (the “Memorandum 

Order”).3 The Memorandum Order granted UBS Financial Services Incorporated of Puerto 

Rico’s Motion to Enforce the Plan of Adjustment and for Related Injunctive Relief (Docket Entry 

No. 21651 in Case No. 17-3283 and Docket Entry No. 1364 in Case No. 17-3566, the “Motion to 

Enforce the Plan”), filed by UBS Financial Services Incorporated of Puerto Rico (“UBS”). The 

Motion to Enforce the Plan sought to enforce the Modified Eighth Amended Title III Joint Plan 

of Adjustment of the Commonwealth of Puerto Rico et al. (Docket Entry No. 19784) (the “Plan”) 

by requesting an order prohibiting Movants and the Employees’ Retirement System of the 

Government of the Commonwealth of Puerto Rico (“ERS”) from prosecuting certain claims in 

the pending action captioned Administración de los Sistemas de Retiro de los Empleados del 

Gobierno y la Judicatura de Puerto Rico v. UBS Financial Services Inc. of Puerto Rico, Civ. No. 

KAC-2011-1067 (the “Commonwealth Action”). (Mot. to Enforce ¶¶ 1, 47.) The Court has 

considered carefully all the parties’ submissions.4

 For the following reasons the Motion is 

denied.

 2 All docket entry references are to entries in Case No. 17-3283.

3 Capitalized terms used but not otherwise defined herein have the meanings given to them 

in the Memorandum Order.

4 The written submissions comprise the UBS Financial Services Incorporated of Puerto 

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DISCUSSION

A party seeking relief under Rule 59(e) 5 must: (i) clearly establish a manifest 

error of law or fact; (ii) clearly establish a manifest injustice; (iii) present newly discovered or 

previously unavailable evidence; or (iv) establish an intervening change in controlling law. See

Marie v. Allied Home Mortg. Corp., 402 F.3d 1, 7 n.2 (1st Cir. 2005). “[A] motion for 

reconsideration of a previous order is an extraordinary remedy that must be used sparingly 

because of interest in finality and conservation of scarce judicial resources.” Lopez Jimenez v. 

Pabon Rodriguez (In re Pabon Rodriguez), 233 B.R. 212, 220 (Bankr. D.P.R. 1999), aff’d, 

2000 WL 35916017 (B.A.P. 1st Cir. 2000), aff’d sub nom. Lopez Jimenez v. Lee (In re Pabon 

Rodriguez), 17 F. App’x 5 (1st Cir. 2001). Accordingly, a Rule 59(e) motion “does not provide 

a vehicle for a party to undo its own procedural failures or to introduce new evidence or advance 

arguments that could and should have been presented to the district court prior to judgment.” 

Quality Cleaning Prods. R.C., Inc. v. SCA Tissue N. Am., LLC, 794 F.3d 200, 208 (1st Cir. 

 

Rico’s Opposition to Motion for Reconsideration under Bankruptcy Rule 9023 (Docket 

Entry No. 23175), filed by UBS; Response of the Avoidance Actions Trustee to the 

Motion for Reconsideration [DE 23058] of the ERS Beneficiaries (Docket Entry No. 

23165), filed by Drivetrain, LLC (the “Avoidance Actions Trustee”); Joinder of the 

Official Committee of Unsecured Creditors to the Response Of The Avoidance Actions 

Trustee to the Motion for Reconsideration of the ERS Beneficiaries (Docket Entry No. 

23166), filed by the Official Committee of Unsecured Creditors; and Consolidated Reply 

to Docket Numbers 23165, 23166 and 23175 (Docket Entry No. 23194), filed by the 

Movants. 

5 Rule 59(e) is made applicable in this proceeding by Federal Rule of Bankruptcy 

Procedure 9023. The Federal Rules of Bankruptcy Procedure are made applicable in 

these Title III cases by section 310 of the Puerto Rico Oversight, Management, and 

Economic Stability Act (“PROMESA”), 48 U.S.C. § 2170 et seq. The outcome of the 

instant contested matter would, however, be the same under the standard applicable to a 

motion pursuant to Rule 60(b) of the Federal Rules of Civil Procedure, made applicable 

by Federal Rule of Bankruptcy Procedure 9024. See Villanueva-Mendez v. Nieves 

Vazquez, 360 F. Supp. 2d 320, 322 (D.P.R. 2005), aff’d, 440 F.3d 11 (1st Cir. 2006).

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2015) (citation and internal quotation marks omitted). Pertinently, a party’s disagreement with 

the court’s decision and desire to have the court “rethink its holding” are not grounds for 

reconsideration. Rosario-Mendez v. Hewlett Packard Caribe, 660 F. Supp. 2d 229, 234 (D.P.R. 

2009).

The Reconsideration Motion challenges the Court’s exercise of authority pursuant 

to section 105(a) of the Bankruptcy Code to enjoin the prosecution of the Commonwealth 

Action. Movants argue that the tort claims that they have asserted against UBS pursuant to 

section 1802 of the Puerto Rico Civil Code (31 L.P.R.A. § 5141) (“Article 1802”) are not 

derivative in nature, and thus are not owned by ERS. (See Mot. at 3-4, 8.) Movants also contend 

that the relief sought in the Commonwealth Action (damages for economic injury sustained by

individual plaintiffs) is distinct from the relief sought by the Avoidance Actions Trustee through 

the Underwriter Action (disgorgement of underwriting fees). (See Mot. at 6-7.) Finally, 

Movants contend that the Memorandum Order constitutes a “judicial taking” of the Movants’ 

individual causes of actions. (See Mot. at 7.) 

In its decision, the Court held that the Movants’ asserted claims against UBS, 

based on UBS’ business dealings with ERS, are derivative of claims owned by ERS. (Mem. 

Ord. at 7-11.) The Court held that the Avoidance Actions Trustee, pursuant to section 78.6 of 

the Plan, is granted exclusive authority to prosecute, settle, or abandon claims on behalf of 

Avoidance Actions Trust (including claims asserted by ERS to recover damages from UBS 

through the Underwriter Action). (See Mem. Ord. at 13.) The Court also determined that the 

continued parallel litigation of the derivative claims by the Movants would infringe on the 

Avoidance Actions Trustee’s “ability to exercise litigation control and resolve the Underwriter 

Action.” (Mem. Ord. 14.) 

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Movants’ arguments do not establish a basis for reconsideration. First, the

Memorandum Order carefully addressed and rejected Movants’ assertion that they are entitled to 

recover damages from UBS pursuant to Article 1802, including the argument that Movants’ tort

claims are not derivative claims, and the Court concluded that the damages claimed by Movants 

are a “secondary harm” flowing from UBS’s contractual relationship with ERS. (See Mem. Ord.

at 11.) The Movants’ attempt to distinguish the relief sought in the Underwriter Action from the 

relief sought in the Commonwealth Action is misplaced. As discussed at length in the 

Memorandum Order, the claims Movants seek to prosecute through the Commonwealth Action 

that are based on business dealings between UBS and ERS are derivative of claims owned by 

ERS. The Court held that the Avoidance Actions Trustee has authority to prosecute claims on 

behalf of ERS “to recover monetary awards for the benefit of the Avoidance Actions Trust.” 

(Mem. Ord. at 13.) Thus, Movants have not identified any facts overlooked by this Court nor 

identified any law that was not previously examined by this Court regarding the Movants’ 

derivative claims or interpretation of the Plan provisions related to the Avoidance Actions 

Trustee. 

Second, Movants’ new argument that enjoining prosecution of the 

Commonwealth Action constitutes a “judicial taking” lacks merit. Through the Motion to 

Enforce the Plan, UBS, in its role as an underwriter and investment advisor to ERS (a Title III 

debtor), sought an order to enjoin the prosecution of the Commonwealth Action against UBS 

pursuant to sections 78 and 91.1(g) of the Plan, arguing that the underlying claims belonged to 

ERS rather than to individual beneficiaries. (See Mem. Ord. at 6.) The crux of the dispute 

between the parties in this contested matter was competing claims regarding ownership, which 

the Court resolved in favor of ownership by ERS and its successor in interest. The Court did not 

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deprive the ERS Beneficiaries of any rights that had belonged to them. The Memorandum Order

simply resolved the dispute between UBS and Movants, concluding that Movants had received 

bargained-for treatment of their ERS pension benefit rights under the terms of the Plan and that

their claims against ERS have been discharged. (See Mem. Ord. at 6.) The resolution of the 

dispute concerning rights under the Plan cannot be a taking within the meaning of the Fifth 

Amendment. See In re Lazy Days’ RV Center Inc. et. al., 724 F.3d 418, 425 (3d Cir. 2013) 

(noting that, in the context of bankruptcy, the adjudication of “disputed and competing claims” 

under a settlement agreement cannot be a taking). Also, Movants’ argument concerning a 

judicial taking was raised for the first time in the Reconsideration Motion, warranting its 

rejection for that reason alone. See Venegas-Hernandez v. Sonolux Records, 370 F.3d 183, 189-

90 (1st Cir. 2004) (“[P]arties cannot use Rule 59(e) motions to raise new arguments that could 

have been made before judgment issued or to undo their own procedural failures.”); see also

Vega v. Hernandez, 381 F. Supp. 2d 31, 35 (D.P.R. 2005) (noting that motions for 

reconsideration are not vehicles for the presentation of new theories).

CONCLUSION

Movants have failed to establish that the Court made a manifest error of law or 

fact. Moreover, Movants have not identified any intervening change in controlling law since the 

Court made its decision, nor do Movants refer to any previously unavailable or newly discovered 

facts that would affect the Court’s legal conclusions underlying the decision. Accordingly, the 

Reconsideration Motion is denied.

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This Order resolves Docket Entry No. 23058 in Case No. 17-3283.

SO ORDERED.

Dated: January 26, 2023

 /s/ Laura Taylor Swain 

LAURA TAYLOR SWAIN

United States District Judge

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