WISCOVITCH RENTAS v. FERNANDEZ CABALLERO et al

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IN THE UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF PUERTO RICO
In re: :
:
ANTONIO A. FERNANDEZ, : Case No. 04-10585 (GAC)
MARTHA BERTRAN, :
:
Debtors : Chapter 11
___________________________________:
:
In re: :
:
LASER REALTY, INC., : Case No. 04-12634 (GAC)
:
Debtor : Chapter 7
___________________________________:
:
In re: :
:
CORUS HARDWARE, CORP., : Case No. 07-00067 (GAC)
:
Debtor : Chapter 11
___________________________________:
:
In re: :
:
LASER REALTY, INC., :
:
Plaintiff :
:
v. : Adv. No. 06-00189 (GAC)
:
ANTONIO FERNANDEZ, ET AL., :
:
Defendants :
___________________________________:
DECISION AND ORDER
BACKGROUND
On March 31, 2009, the Court issued a Decision and Order
approving a Settlement Agreement between the captioned debtors,
Citibank and the Chapter 7 trustee in Laser Realty, Inc., Noreen
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Wiscovitch Rentas. The terms of the agreement were discussed at
length in the Court’s initial Decision and Order, which is
incorporated by reference. In short, the agreement provides for
monetary compensation to Citibank, by the debtors and other third
parties, in settlement of Citibank’s claims and other contested
matters and an adversary proceeding. General Electric Capital
Corporation (“GEC”) filed a motion for reconsideration, which
Citibank opposed. Thereafter, both parties replied.
DISCUSSION
GEC seeks to alter or amend the order pursuant to Federal Rule
of Bankruptcy Procedure 9023, which makes Federal Rule of Civil
Procedure 59 applicable. This Rule states that “[a]ny motion to
alter or amend a judgment must be filed no later than 10 days after
entry of the judgment.” Fed. R. Civ. P. 59(e). In seeking
reconsideration under Federal Rule of Civil Procedure 59(e), “the
moving party must ‘either clearly establish a manifest error of law
or must present newly discovered evidence.’” Marie v. Allied Home
Mortgage Corp., 402 F.3d 1, 7 n. 2 (1st Cir. 2005)(quoting
Pomerleau v. W. Springfield Pub. Sch., 362 F.3d 143, 146 n. 2 (1st
Cir. 2004)). In Marie, the First Circuit also cited a leading
treatise, noting four grounds for granting a motion for
reconsideration under Federal Rule of Civil Procedure 59(e). These
are “manifest errors of law or fact, newly discovered or previously
unavailable evidence, manifest injustice, and an intervening change
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in controlling law.” Marie v. Allied Home Mortgage Corp., 402 F.3d
at 7 n. 2 (citing 11 C. Wright et al., Federal Practice & Procedure
§ 2810.1 (2d ed.1995)).
GEC claims that the Court erred in failing to inquire as to
whether the debtors and the third party payors have the ability to
fund the payments to Citibank and the probability of default.
Moreover, GEC continues to refer to insurance policies and their
potential use in funding the payments to Citibank.
Both of these issues were raised by GEC prior to the Court’s
decision. The Court concludes that GEC has failed to demonstrate
a manifest error of law or fact by merely reiterating arguments
which the Court previously considered and rejected. The Court
notes that none of the creditors stand to be prejudiced by the
Settlement Agreement, since no bankruptcy estate will be required
to provide Citibank with more than its pro rata share of the estate
assets, whatever those assets are. Thus, during the bankruptcy
cases, approval of the Settlement Agreement results in no potential
disadvantage to creditors, yet creditors benefit if the Settlement
Agreement is approved and complied with, since Citibank’s claim
will be reduced from $11,751,856.59 to $7,000,000.00. Laser’s
estate will also be the beneficiary of $150,000.00 and all parties
are relieved of the ongoing expenses of protracted litigation. The
debtors and the third-parties have much to gain from compliance
with the agreement, which will end the litigation between the
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parties and significantly reduce Citibank’s claims. Their
agreement to treat the debt as nondischargeable if they default,
also gives a significant incentive to the debtors and the third
party corporations to comply with the Settlement Agreement. The
Court agrees with GEC’s statement, in its reply to Citibank’s
opposition to the motion for reconsideration, that the Court does
not presently have jurisdiction to litigate the merits of the
ownership of the referenced insurance proceeds. Thus, the issue of
any potential use of insurance proceeds to pay Citibank is not
before the Court. Accordingly, GEC’s motion for reconsideration
will be denied.
ORDER
WHEREFORE IT IS ORDERED that General Electric Capital
Corporation’s motion to reconsider the Decision and Order approving
the proposed Settlement Agreement shall be, and it hereby is,
DENIED.
SO ORDERED.
San Juan, Puerto Rico, this 5th day of August, 2009.
BY THE COURT:
s/ Gerardo A. Carlo
_______________________
GERARDO A. CARLO
U.S. Bankruptcy Judge
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