In re: the Financial Oversight v. Cooperativa De Ahorro Ycredito Abraham Rosa

United States Court of Appeals
For the First Circuit
No. 22-1079
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 SALES TAX FINANCING
CORPORATION, a/k/a Cofina; THE FINANCIAL OVERSIGHT AND
MANAGEMENT BOARD FOR PUERTO RICO, AS REPRESENTATIVE FOR THE
EMPLOYEES' RETIREMENT SYSTEM OF THE GOVERNMENT OF THE
COMMONWEALTH OF PUERTO RICO; 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); THE FINANCIAL OVERSIGHT AND MANAGEMENT BOARD
FOR PUERTO RICO, AS REPRESENTATIVE OF THE PUERTO RICO PUBLIC
BUILDINGS AUTHORITY,
Debtors,
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 OF THE PUERTO RICO PUBLIC BUILDINGS AUTHORITY,
Debtors, Appellees, Cross-Appellants,
THE FINANCIAL OVERSIGHT AND MANAGEMENT BOARD FOR PUERTO RICO, AS
REPRESENTATIVE FOR THE EMPLOYEES' RETIREMENT SYSTEM OF THE
GOVERNMENT OF THE COMMONWEALTH OF PUERTO RICO,
Debtor, Appellee,
v.
COOPERATIVA DE AHORRO Y CREDITO ABRAHAM ROSA; COOPERATIVA DE
AHORRO Y CREDITO DE CIALES; COOPERATIVA DE AHORRO Y CREDITO DE
JUANA DIAZ; COOPERATIVA DE AHORRO Y CREDITO DE RINCON;
COOPERATIVA DE AHORRO Y CREDITO DE VEGA ALTA; COOPERATIVA DE

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AHORRO Y CREDITO DR. MANUEL ZENO GANDIA,
Objectors, Appellants, Cross-Appellees,
SUIZA DAIRY CORP.,
Objector, Claimant, Appellant, Cross-Appellee,
LUIS F. PABON BOSQUES; RAUL MARTINEZ PEREZ; ELVIN A. ROSADO
MORALES; CARLOS A. ROJAS ROSARIO; RAFAEL TORRES RAMOS,
Creditors, Appellants, Cross-Appellees,
DESARROLLADORA ORAMA, S.E.; C.O.D. TIRE DISTRIBUTORS IMPORTS
ASIA, INC.; CORREA TIRE DISTRIBUTOR INC.; WORLD WIDE TIRE, INC.;
SEQUERIA TRADING CORPORATION; SABATIER TIRE CENTER, INC.; VICTOR
LOPEZ CORTES, INC.; MULTI GOMAS, INC.; JOSE COLLAZO PEREZ;
IVELISSE TAVARES MARRERO; MANUEL PEREZ ORTIZ; CORAL COVE, INC.;
SUCESION ANGEL ALVAREZ PEREZ; ANTONIO COLON SANTIAGO;
COOPERATIVA DE AHORRO Y CREDITO DE AGUADA; VILMA TERESA TORRES
LOPEZ; VIVIANA ORTIZ MERCADO; ORLANDO TORRES BERRIOS; GERMAN
TORRES BERRIOS; JUAN ALBERTO TORRES BERRIOS; VHERMANOS TORRES
TORRES, INC.; CORPORACION PLAYA INDIA, S.E.; MARIANO RAMOS
GONZALEZ; RAMON MORAN LOUBRIEL; RAFAEL MORAN LOUBRIEL; ANA MORAN
LOUBRIEL; SAN GERONIMO CARIBE PROJECT, INC.; CARIBBEAN AIRPORT
FACILITIES INC.; ESTATE OF RAUL DE PEDRO & DIANA MARTINEZ;
ALFONSO FERNANDEZ CRUZ; SUN AND SAND INVESTMENTS, CORP.;
FDR1500, CORP.; MARGARETA BLONDET; SUCESION COMPUESTO POR MARIA
I. RUBERT BLONDET; SONIA RUBERT BLONDET; MARGARITA RUBERT
BLONDET; SONIA RUBERT, Administradora; MANUEL A. RIVERA-SANTOS;
JORGE RIVERA-SANTOS; CARLOS MANUEL RIVERA-SANTOS; PABLO MELENDEZ
BRULLA; SUCESION AGUSTIN RODRIGUEZ COLON; GLORIA M. ESTEVA
MARQUES; SUCESION MANUEL MARTINEZ RODRIGUEZ; LUIS REYES FEIKERT;
JORGE RAMON POZAS; MIRIAM SANCHEZ LEBRON; JUAN A. TAPIA ORTIZ;
ANTONIO PEREZ COLON,
Claimants, Appellees,
PFZ PROPERTIES, INC.; OSCAR ADOLFO MANDRY APARICIO; MARIA DEL
CARMEN AMALIA MANDRY LLOMBART; SELMA VERONICA MANDRY LLOMBART;
MARIA DEL CARMEN LLOMBART BAS; OSCAR ADOLFO MANDRY BONILLA;
GUSTAVO ALEJANDRO MANDRY BONILLA; YVELISE HELENA FINGERHUT
MANDRY; MARGARET ANN FINGERHUT MANDRY; VICTOR ROBERT FINGERHUT
MANDRY; JUAN CARLOS ESTEVA FINGERHUT; PEDRO MIGUEL ESTEVA
FINGERHUT; MARIANO JAVIER MCCONNIE FINGERHUT; JANICE MARIE
MCCONNIE FINGERHUT; VICTOR MICHAEL FINGERHUT COCHRAN; MICHELLE
ELAINE FINGERHUT COCHRAN; ROSA ESTELA MERCADO GUZMAN; EDUARDO

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JOSE MANDRY MERCADO; SALVADOR RAFAEL MANDRY MERCADO; MARGARITA
ROSA MANDRY MERCADO; ADRIAN ROBERTO MANDRY MERCADO; VICENTE
PEREZ ACEVEDO; CORPORACION MARCARIBE INVESTMENT; DEMETRIO AMADOR
INC.; DEMETRIO AMADOR ROBERTS; MARUZ REAL ESTATE CORP.; LORTU-TA
LTD., INC.; LA CUARTEROLA, INC.; JUAZA, INC.; CONJUGAL
PARTNERSHIP ZALDUONDO-MACHICOTE; FRANK E. TORRES RODRIGUEZ; EVA
TORRES RODRIGUEZ; FINCA MATILDE, INC.; JORGE RAFAEL EDUARDO
COLLAZO QUINONES,
Objectors, Claimants, Appellees,
ANTONIO MARTIN CERVERA; MARIA TERESITA MARTIN; WANDA ORTIZ
SANTIAGO; NANCY I. NEGRON-LOPEZ; GROUP WAGE CREDITORS; YASHEI
ROSARIO; ANA A. NUNEZ VELAZQUEZ; EDGARDO MARQUEZ LIZARDI; MARIA
M. ORTIZ MORALES; ARTHUR SAMODOVITZ; MIGUEL LUNA DE JESUS;
ISMAEL L. PURCELL SOLER; ALYS COLLAZO BOUGEOIS; MILDRED BATISTA
DE LEON; JAVIER ALEJANDRINO OSORIO; SERVICE EMPLOYEES
INTERNATIONAL UNION (SEIU); INTERNATIONAL UNION, UNITED
AUTOMOBILE, AEROSPACE AND AGRICULTURAL IMPLEMENT WORKERS OF
AMERICA; MAPFRE PRAICO INSURANCE COMPANY; CERTAIN CREDITORS WHO
FILED ACTIONS IN THE UNITED STATES DISTRICT COURT FOR THE
DISTRICT OF PUERTO RICO; MED CENTRO, INC., f/k/a Consejo de
Salud de la Comunidad de la Playa de Ponce, Inc.; ASOCIACION DE
JUBILADOS DE LA JUDICATURA DE PUERTO RICO; HON. HECTOR URGELL
CUEBAS; COOPERATIVA DE AHORRO Y CREDITO VEGABAJENA; UNIVERSITY
OF PUERTO RICO RETIREMENT SYSTEM TRUST; PETER C. HEIN; MIRIAM E.
LIMA COLON; BETZAIDA FELICIANO CONCEPCION; ANGEL L. MENDEZ
GONZALEZ; ASOCIACION DE MAESTROS PUERTO RICO; ASOCIACION DE
MAESTROS DE PUERTO RICO-LOCAL SINDICAL; MORGAN STANLEY & CO.
LLC; GOLDMAN SACHS & CO. LLC; J.P. MORGAN SECURITIES LLC;
SANTANDER SECURITIES LLC; SIDLEY AUSTIN LLP; BMO CAPITAL MARKETS
GKST, INC.; CITIGROUP GLOBAL MARKETS INC.; SAMUEL A. RAMIREZ &
CO., INC.; MESIROW FINANCIAL, INC.; MERRILL LYNCH, PIERCE,
FENNER & SMITH INC.; MERRILL LYNCH CAPITAL SERVICES, INC.;
BARCLAYS CAPITAL INC.; RBC CAPITAL MARKETS, LLC; RAYMOND JAMES &
ASSOCIATES, INC.; COMMUNITY HEALTH FOUNDATION OF P.R. INC.;
QUEST DIAGNOSTICS OF PUERTO RICO, INC.; U.S. BANK TRUST NATIONAL
ASSOCIATION, as Trustee for the PRPFC Outstanding Bonds and
PRIFA Bonds, and Fiscal Agent for PRPBA Bonds; U.S. BANK
NATIONAL ASSOCIATION, as Trustee for the PRPFC Outstanding Bonds
and PRIFA Bonds, and Fiscal Agent for PRPBA Bonds; NILSA
CANDELARIO; EL OJO DE AGUA DEVELOPMENT, INC.; PEDRO JOSE NAZARIO
SERRANO; JOEL RIVERA MORALES; MARIA DE LOURDES GOMEZ PEREZ;
HECTOR CRUZ VILLANUEVA; LOURDES RODRIGUEZ; LUIS M. JORDAN
RIVERA; TACONIC CAPITAL ADVISORS LP; AURELIUS CAPITAL
MANAGEMENT, LP; CANYON CAPITAL ADVISORS LLC; FIRST BALLANTYNE
LLC; MOORE CAPITAL MANAGEMENT, LP; PUERTO RICO FISCAL AGENCY AND

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FINANCIAL ADVISORY AUTHORITY; HON. PEDRO R. PIERLUISI URRUTIA;
UNITED STATES, on behalf of the Internal Revenue Service;
ASOCIACION PUERTORRIQUENA DE LA JUDICATURA, INC.; FEDERACION DE
MAESTROS DE PUERTO RICO, INC.; GRUPO MAGISTERIAL EDUCADORES(AS)
POR LA DEMOCRACIA, UNIDAD, CAMBIO, MILITANCIA Y ORGANIZACION
SINDICAL, INC.; UNION NACIONAL DE EDUCADORES Y TRABAJADORES DE
LA EDUCACION, INC.; MARIA A. CLEMENTE ROSA; JOSE N. TIRADO
GARCIA, as President of the United Firefighters Union of Puerto
Rico,
Objectors, Appellees,
VAQUERIA TRES MONJITAS, INC.; BLACKROCK FINANCIAL MANAGEMENT,
INC.; EMSO ASSET MANAGEMENT LIMITED; MASON CAPITAL MANAGEMENT,
LLC; SILVER POINT CAPITAL, L.P.; VR ADVISORY SERVICES, LTD;
AURELIUS CAPITAL MANAGEMENT, LP, on behalf of its managed
entities; GOLDENTREE ASSET MANAGEMENT LP, on behalf of funds
under management; WHITEBOX ADVISORS LLC, on behalf of funds
under management; MONARCH ALTERNATIVE CAPITAL LP, on behalf of
funds under management; TACONIC CAPITAL ADVISORS L.P., on behalf
of funds under management; ARISTEIA CAPITAL, LLC, on behalf of
funds under management; FARMSTEAD CAPITAL MANAGEMENT, LLC, on
behalf of funds under management; FOUNDATION CREDIT, on behalf
of funds under management; CANYON CAPITAL ADVISORS LLC, in its
capacity as a member of the QTCB Noteholder Group; DAVIDSON
KEMPNER CAPITAL MANAGEMENT LP, in its capacity as a member of
the QTCB Noteholder Group; SCULPTOR CAPITAL LP, in its capacity
as a member of the QTCB Noteholder Group; SCULPTOR CAPITAL II
LP, in its capacity as a member of the QTCB Noteholder Group;
AMBAC ASSURANCE CORPORATION; ANDALUSIAN GLOBAL DESIGNATED
ACTIVITY COMPANY; CROWN MANAGED ACCOUNTS, for and on behalf of
Crown/PW SP; LMA SPC, for and on behalf of Map 98 Segregated
Portfolio; MASON CAPITAL MASTER FUND LP; OAKTREE-FORREST MULTI-
STRATEGY, LLC (SERIES B); OAKTREE OPPORTUNITIES FUND IX, L.P.;
OAKTREE OPPORTUNITIES FUND IX (PARALLEL), L.P.; OAKTREE
OPPORTUNITIES FUND IX (PARALLEL 2), L.P.; OAKTREE HUNTINGTON
INVESTMENT FUND II, L.P.; OAKTREE OPPORTUNITIES FUND X, L.P.;
OAKTREE OPPORTUNITIES FUND X (PARALLEL), L.P.; OAKTREE
OPPORTUNITIES FUND X (PARALLEL 2), L.P.; OAKTREE VALUE
OPPORTUNITIES FUND HOLDINGS, L.P.; OCEANA MASTER FUND LTD.;
OCHER ROSE, L.L.C.; PENTWATER MERGER ARBITRAGE MASTER FUND LTD.;
PWCM MASTER FUND LTD.; REDWOOD MASTER FUND, LTD.; BANK OF NEW
YORK MELLON; OFFICIAL COMMITTEE OF UNSECURED CREDITORS; ASSURED
GUARANTY CORP.; ASSURED GUARANTY MUNICIPAL CORP.; OFFICIAL
COMMITTEE OF RETIRED EMPLOYEES; NATIONAL PUBLIC FINANCE
GUARANTEE CORP.; FINANCIAL GUARANTY INSURANCE COMPANY;
AMERINATIONAL COMMUNITY SERVICES, LLC, as servicer for the GDB

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Debt Recovery Authority; CANTOR-KATZ COLLATERAL MONITOR LLC, as
Collateral Monitor for the GDB Debt Recovery Authority; ATLANTIC
MEDICAL CENTER, INC.; CAMUY HEALTH SERVICES, INC.; CENTRO DE
SALUD FAMILIAR DR. JULIO PALMIERI FERRI, INC.; CIALES PRIMARY
HEALTH CARE SERVICES, INC.; CORP. DE SERV. MEDICOS PRIMARIOS Y
PREVENCION DE HATILLO, INC.; COSTA SALUD, INC.; CENTRO DE SALUD
DE LARES, INC.; CENTRO DE SERVICIOS PRIMARIOS DE SALUD DE
PATILLAS, INC.; HOSPITAL GENERAL CASTANER, INC.; GNMA & US
GOVERNMENT TARGET MATURITY FUND FOR PUERTO RICO RESIDENTS, INC.,
f/k/a Puerto Rico GNMA & U.S. Government Target Maturity Fund,
Inc.; MORTGAGE-BACKED & US GOVERNMENT SECURITIES FUND FOR PUERTO
RICO RESIDENTS, INC., f/k/a Puerto Rico Mortgage-Backed & U.S.
Government Securities Fund, Inc.; PUERTO RICO RESIDENTS BOND
FUND I, f/k/a Puerto Rico Investors Bond Fund I; PUERTO RICO
RESIDENTS TAX-FREE FUND, INC., f/k/a Puerto Rico Investors Tax-
Free Fund, Inc.; PUERTO RICO RESIDENTS TAX-FREE FUND II, INC.,
f/k/a Puerto Rico Investors Tax-Free Fund II, Inc.; PUERTO RICO
RESIDENTS TAX-FREE FUND III, INC., f/k/a Puerto Rico Investors
Tax-Free Fund III, Inc.; PUERTO RICO RESIDENTS TAX-FREE FUND IV,
INC., f/k/a Puerto Rico Investors Tax-Free Fund IV, Inc.; PUERTO
RICO RESIDENTS TAX-FREE FUND V, INC., f/k/a Puerto Rico
Investors Tax-Free Fund V, Inc.; PUERTO RICO RESIDENTS TAX-FREE
FUND VI, INC., f/k/a Puerto Rico Investors Tax-Free Fund VI,
Inc.; TAX-FREE FIXED INCOME FUND FOR PUERTO RICO RESIDENTS,
INC., f/k/a Puerto Rico Fixed Income Fund, Inc.; TAX-FREE FIXED
INCOME FUND II FOR PUERTO RICO RESIDENTS, INC., f/k/a Puerto
Rico Fixed Income Fund II, Inc.; TAX-FREE FIXED INCOME FUND III
FOR PUERTO RICO RESIDENTS, INC., f/k/a Puerto Rico Fixed Income
Fund III, Inc.; TAX-FREE FIXED INCOME FUND IV FOR PUERTO RICO
RESIDENTS, INC., f/k/a Puerto Rico Fixed Income Fund IV, Inc.;
TAX-FREE FIXED INCOME FUND V FOR PUERTO RICO RESIDENTS, INC.,
f/k/a Puerto Rico Fixed Income Fund V, Inc.; TAX-FREE FIXED
INCOME FUND VI FOR PUERTO RICO RESIDENTS, INC., f/k/a Puerto
Rico Fixed Income Fund VI, Inc.; TAX FREE FUND FOR PUERTO RICO
RESIDENTS, INC., f/k/a Tax-Free Puerto Rico Fund, Inc.; TAX FREE
FUND II FOR PUERTO RICO RESIDENTS, INC., f/k/a Tax-Free Puerto
Rico Fund II, Inc.; TAX-FREE HIGH GRADE PORTFOLIO BOND FUND FOR
PUERTO RICO RESIDENTS, INC., f/k/a Puerto Rico AAA Portfolio
Bond Fund, Inc.; TAX-FREE HIGH GRADE PORTFOLIO BOND FUND II FOR
PUERTO RICO RESIDENTS, INC., f/k/a Puerto Rico AAA Portfolio
Bond Fund II, Inc.; TAX-FREE HIGH GRADE PORTFOLIO TARGET
MATURITY FUND FOR PUERTO RICO RESIDENTS, INC., f/k/a Puerto Rico
AAA Portfolio Target Maturity Fund, Inc.; TAX FREE TARGET
MATURITY FUND FOR PUERTO RICO RESIDENTS, INC., f/k/a Tax-Free
Puerto Rico Target Maturity Fund, Inc.; UBS IRA SELECT GROWTH &
INCOME PUERTO RICO FUND; SERVICIOS INTEGRALES EN LA MONTANA
(SIM),

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Creditors, Appellees,
UNITED STATES,
Respondent, Appellee.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF PUERTO RICO
[Hon. Laura Taylor Swain,* U.S. District Judge]
Before
Kayatta, Howard, and Thompson,
Circuit Judges.
Guillermo Ramos Luiña for appellants, cross-appellees
Cooperativa de Ahorro y Crédito Abraham Rosa, Cooperativa de Ahorro
y Crédito de Ciales, Cooperativa de Ahorro y Crédito de Rincón,
Cooperativa de Cooperativa de Ahorro de Vega Alta, Crédito Dr.
Manuel Zeno Gandía, and Cooperativa de Ahorro y Crédito de Juana
Díaz.
Rafael A. Gonzalez-Valiente, with whom Godreau & Gonzalez
Law, LLC was on brief, for appellant, cross-appellee Suiza Dairy
Corporation.
Victor M. Rivera-Rios for appellants, cross-appellees Luis F.
Pabón Bosques, Raul Martinez Perez, Elvin A. Rosado Morales, Carlos
A. Rojas Rosario, and Rafael Torres Ramos.
Martin J. Bienenstock, with whom Jeffrey W. Levitan, Mark D.
Harris, Brian S. Rosen, Ehud Barak, Lucas Kowalczyk, Timothy W.
Mungovan, John E. Roberts, Adam L. Deming, Joseph S. Hartunian,
and Proskauer Rose LLP were on brief, for appellee, cross-appellant
the Financial Oversight and Management Board for Puerto Rico.
Peter M. Friedman, with whom John J. Rapisardi, Maria J.
DiConza, and O'Melveny & Meyers LLP were on brief, for appellees
Governor Pedro R. Pierluisi and the Puerto Rico Fiscal Agency and
Financial Advisory Authority.
Ana A. Núñez Velázquez, Aguadilla, PR, Pro Se.
Charles A. Cuprill-Hernández, with whom Charles A. Cuprill,
* Of the Southern District of New York, sitting by
designation.

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P.S.C. was on brief, for appellees Oscar Adolfo Mandry Aparicio,
María del Carmen Amalia Mandry Llombart, Selma Verónica Mandry
Llombart, María del Carmen Llombart Bas, Oscar Adolfo Mandry
Bonilla, Gustavo Alejandro Mandry Bonilla, Yvelise Helena
Fingerhut Mandry; Margaret Ann Fingerhut Mandry, Victor Robert
Fingerhut Mandry, Juan Carlos Esteva Fingerhut, Pedro Miguel
Esteva Fingerhut, Mariano Javier McConnie Fingerhut, Janice Marie
McConnie Fingerhut, Victor Michael Fingerhut Cochran, Michelle
Elaine Fingerhut Cochran, Rosa Estela Mercado Guzmán, Eduardo José
Mandry Mercado, Salvador Rafael Mandry Mercado, Margarita Rosa
Mandry Mercado, and Adrián Roberto Mandry Mercado.
Daniel Winik, Attorney, Civil Division, with whom Brian M.
Boynton, Principal Deputy Assistant Attorney General, W. Stephen
Muldrow, United States Attorney, Michael S. Raab, Attorney, Civil
Division, and Michael Shih, Attorney, Civil Division, were on
brief, for intervenor, appellee the United States.
Russell A. Del Toro Sosa, with whom David Carrion Baralt was
on brief, for appellee PFZ Properties, Inc.
Maria Mercedes Figueroa Morgade on brief for appellees
Demetrio Amador Inc. and Demetrio Amador Roberts.
Alexis Fuentes-Hernández on brief for appellees Maruz Real
Estate Corp., Lortu-Ta LTD., Inc., La Cuarterola, Inc., Juaza,
Inc., Frank E. Torres Rodriguez and Eva Torres Rodriguez.
Arturo J. García-Solá, with whom Nayuan Zouairaban and
McConnell Valdes LLC were on brief, for appellee AmeriNational
Community Services, LLC.
Douglas I. Koff, with whom Peter Amend, Douglas S. Mintz, and
Schulte, Roth & Zabel were on brief, for appellee Cantor-Katz
Collateral Monitor LLC.
Eduardo J. Capdevila-Díaz, with whom Isabel M. Fullana-
Fraticelli and Isabel Fullana-Fraticelli & Assocs., PSC were on
brief, for appellee Finca Mitilde, Inc.
Carlos Fernandez-Nadal on brief for appellee Jorge Rafael
Eduardo Collazo Quinones.
Maximiliano Trujillo-González on brief for appellees Manuel
A. Rivera-Santos, Jorge Rivera-Santos, and Carlos Manuel Rivera-
Santos.
Juan A. Tapia Ortiz, Brooklyn, NY, Pro Se.
November 23, 2022

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THOMPSON, Circuit Judge. On January 18, 2022, the
district court entered an Order and Judgment confirming the
Modified Eighth Amended Title III Joint Plan of Adjustment of the
Commonwealth of Puerto Rico, the Employees Retirement System of
the Government of the Commonwealth of Puerto Rico, and the Puerto
Rico Public Buildings Authority ("the Confirmation Order") as well
as Findings of Fact and Conclusions of Law in Connection with the
Confirmation Order ("the FF/CL"). As the full name of the
Confirmation Order suggests, this final debt restructuring plan
was the product of progressive iterations about how to resolve the
initial petition for debt restructuring, filed in May 2017 by
Puerto Rico's Financial Oversight and Management Board ("the
Board") on behalf of the Commonwealth of Puerto Rico and several
of the Commonwealth's agencies and instrumentalities pursuant to
Title III of the Puerto Rico Oversight, Management, and Stability
Act ("PROMESA"). Several creditors filed a notice of appeal to
challenge the Confirmation Order and the FF/CL. This court
consolidated the appeals for briefing and oral argument pursuant
to Rule 3(b)(2) of the Federal Rules of Appellate Procedure. This
opinion resolves the appeal filed by a group of six Credit Unions
(also often referred to as "cooperatives" or "cooperativas"), each
of whom filed a proof of claim in this Title III case and then
jointly filed objections to the evolving plan for restructuring
the Commonwealth's debts (details about the bases for their joint

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objections to come in a moment). As we explain below, the Credit
Unions' challenge to the district court's rejection of their
objections is now moot. Before we explain why, we need to
introduce the companion adversary proceeding.1
Almost a year after the Commonwealth filed its initial
Title III petition, the Credit Unions initiated an adversary
proceeding claiming that the Commonwealth and several of its
agencies and instrumentalities defrauded them into purchasing
worthless bonds as well as compelled them to invest in these
security instruments such that a taking without just compensation
had occurred in violation of the U.S. Constitution's Fifth
Amendment.2 The Credit Unions alleged that these claims of
misconduct should render their creditor claims in the bankruptcy
proceeding non-dischargeable pursuant to 11 U.S.C. §§ 105 and 944
and PROMESA.
While their adversary complaint was pending, the Credit
Unions filed joint objections to the Seventh Amended Title III
Joint Plan of Adjustment and to the Revised Eighth Amended Plan of
1 "[A]n adversary proceeding is a subsidiary lawsuit within
the larger framework of a bankruptcy case." In re Fin. Oversight
& Mgmt. Bd. for P.R., 872 F.3d 57, 63 (1st Cir. 2017) (alteration
in original) (quoting Kowal v. Malkemus (In re Thompson), 965 F.2d
1136, 1140 (1st Cir. 1992)); see also Fed. R. Bankr. P. 7001 (which
48 U.S.C. § 2170 says shall apply to PROMESA cases).
2 In the adversary proceeding, the Credit Unions also alleged
some Commonwealth-statute-based fraud and negligence claims.

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Adjustment, arguing that their claims for fraud and
unconstitutional takings in their adversary action against the
debtors should be explicitly excepted from discharge pursuant to
11 U.S.C. § 944(c)(1).
Meanwhile, back in the docket of the adversary
proceeding, the defendants filed motions to dismiss the Credit
Unions' second amended complaint. In late December 2021, the
district court granted the motions, concluding that most of the
Credit Unions' claims sounded in fraud but failed to meet the
heightened pleading standard for claims based in fraud, that the
plaintiffs failed to state a plausible takings claim, and that
some of the claims against some of the defendants lacked subject
matter jurisdiction because the claim was either not yet ripe or
had overripened such that the claim was now moot. See In re Fin.
Oversight & Mgmt. Bd. for P.R., 578 F. Supp. 3d 267 (D.P.R. 2021).
The Credit Unions appealed.
While the Credit Unions' appeal from the dismissal of
their adversary proceeding was in the briefing stage here, the
district court entered the Confirmation Order and the FF/CL. The
district court summarily overruled the Credit Unions' joint
objection to the plan:
[F]or the reasons set forth in th[e] [c]ourt's
Memorandum Opinion Granting Defendants' Motions to
Dismiss Second Amended Complaint . . . , the [c]ourt
overrules the objection of [the Credit Unions] to the
extent it incorporates the allegations set forth in

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their adversary complaint, which has now been dismissed
without leave to amend, alleging that their claims are
protected by the Takings Clause. Because the [c]ourt
has concluded that the Credit Unions have not stated a
claim upon which relief could be granted under the
Takings Clause, the [c]ourt finds that their claims for
payment concerning that alleged taking are not protected
by the Fifth Amendment and may be impaired and discharged
by the Plan. Moreover, to the extent the Credit Unions
have asserted a claim that approval of the Plan itself
would constitute a taking, the Credit Unions' objection
is also overruled for the reasons discussed in
connection with the objections of other bondholders
. . . .
The Credit Unions appealed both the Confirmation Order and the
FF/CL, arguing the district court was wrong to overrule their
objections to the proposed plans of adjustment when their appeal
from the dismissal of their adversary proceeding -- which they say
would result in a revival of nondischargeable claims against the
Commonwealth -- was still pending in this court. Indeed, their
arguments in this appeal focus exclusively on why their fraud and
takings claims should have survived the adversary defendants'
motions to dismiss as well as why the district court should have
excepted these (according to the Credit Unions) soon-to-be-
meritorious claims from discharge.3
3 Neither the Confirmation Order nor the FF/CL explicitly
mentions the Credit Unions' objections to the proposed plan of
adjustment based on their fraudulent conduct claims or their
arguments about why their fraud-based claims should be excepted
from discharge. The Credit Unions do not argue, however, that the
district court's silence in the FF/CL and the Confirmation Order
about these claims was an error.

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In an opinion issued today, we affirmed the district
court's dismissal of the adversary proceeding, concluding that the
Credit Unions failed to plausibly plead both their fraud-based and
takings claims.4 See In re Fin. Oversight & Mgmt. Bd. for P.R.,
No. 22-1048, ___ F.4th ___ (1st Cir. 2022).
Because we have now affirmed the dismissal of the Credit
Unions' adversary claims, we find ourselves with nothing left to
decide in this appeal from the Confirmation Order and the FF/CL
because the Credit Unions no longer have pending adversary claims
that the district court could except from discharge. The Credit
Unions' arguments about why they say their adversary claims should
have progressed beyond the pleadings stage are moot, and we
therefore need not address their arguments about whether fraud
claims are dischargeable pursuant to PROMESA. See Bos. Bit Labs,
Inc. v. Baker, 11 F.4th 3, 8 (1st Cir. 2021) ("[I]f a case loses
its live-controversy character at any point in the proceedings,
the mootness doctrine generally stops us from pumping new life
into the dispute . . . by 'ousting' the federal courts of
'jurisdiction' and 'requir[ing]' us to 'dismiss[]' the case."
4 In addition, we affirmed the dismissal of the Commonwealth-
statute-based negligence claims as time-barred, and the Credit
Unions' belated challenge to an earlier Government Development
Bank debt modification plan as moot. See In re Fin. Oversight &
Mgmt. Bd. for P.R., No. 22-1048, ___ F.4th at ___.

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(second and third alterations in original) (quoting Deposit Guar.
Nat'l Bank v. Roper, 445 U.S. 326, 335 (1980))).
The Credit Unions' appeal from the Confirmation Order
and the FF/CL is dismissed.

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