Mikhail et al v. ESJ TOWERS INC et al

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IN THE UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF PUERTO RICO
IN RE
ESJ TOWERS INC
Debtor
CASE NO. 22-01676 (ESL)
CHAPTER 11
MAGDY MIKHAIL; OLGA GARCIA-MIKHAIL
Plaintiffs
vs.
FORTALEZA EQUITY PARTNERS 2, LLC;
FORTALEZA HOSPITALITY L.L.C.;
FORTALEZA ESJ, L.L.C.; ESJ TOWERS
VACATION CLUB LLC; BLACK BRIAR PUERTO
RICO LIMITED LIABILITY COMPANY; BLACK
BRIAR ADVISORS LLC; and ESJ TOWERS,
INC.
Defendants
ADVERSARY NO. 25-00005
FILED AND ENTERED 2/24/2026
OPINION AND ORDER
This adversary proceeding is before the court upon the motions to dismiss
filed 	by 	Fortaleza 	Equity 	Partners 	2, 	LLC 	(“Fortaleza 	Equity”), 	Fortaleza
Hospitality 	L.L.C. 	(“Fortaleza 	Hospitality”), 	Fortaleza 	ESJ, 	L.L.C.
(“Fortaleza 	ESJ”), 	and 	ESJ 	Towers 	Vacation 	Club 	LLC 	(“ESJ 	Towers 	Vacation
Club”, and jointly with Fortaleza Equity, Fortaleza Hospitality and Fortaleza
ESJ, “Fortaleza”) (dkt. #75, 76), Black Briar Puerto Rico LLC (“Black Briar
PR”) and Black Briar Advisors LLC (“Black Briar Advisors”, and jointly with
Black Briar PR, “Black Briar”) (dkt. #88), and ESJ Towers, Inc. (“Debtor”, and
jointly 	with 	Fortaleza 	and 	Black 	Briar, 	the 	“Defendants”) 	(dkt. 	#90, 	94);
Plaintiffs’ oppositions thereto (dkt. #81, 101); Defendants’ replies (dkt. #93,
106); and Plaintiffs’ sur-reply (dkt. #110).
Also 	before 	the 	court 	are 	Plaintiffs’ 	requests 	for 	entry 	of 	default
against Black Briar and the Debtor (dkt. #84, 86).
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FACTUAL AND PROCEDURAL BACKGROUND
(A) 	The Bankruptcy Case, Bankr. Case No. 22-01676
1. 	Plaintiffs Dr. Magdy Mikhail and Mrs. Olga García-Mikhail (jointly,
“Plaintiffs”) are vacation club members pursuant to certain ESJ Towers Vacation
Club Owner Agreements for Intervals 1264-29 and 1467-30 (the “Agreements”).
2. 	On June 10, 2022, 	the Debtor filed a 	petition 	for relief under
Chapter 11 of the Bankruptcy Code. See Bankr. Case No. 22-01676, dkt. #1.
3. 	On 	September 	12, 	2022, 	the 	U.S. 	Trustee 	for 	Region 	21 	filed 	a
Notice of Appointment of Unsecured Creditors’ Committee (Bankr. Case No. 22-
01676, 	dkt. 	#111, 	136, 	719, 	1004), 	appointing 	creditors 	who 	hold 	unsecured
claims against the Debtor, including deeded timeshare owners and vacation club
members, to the Unsecured Creditors Committee (“UCC”).
4. 	On November 28, 2023, Debtor and Fortaleza Equity filed a Joint
Motion For Entry Of Sale Order: (A) Approving Asset Purchase Agreement And Sale
Of Substantially All Of Debtor’s Assets to the Purchaser, Pursuant To Sections
363 and 365 of the Bankruptcy Code and Bankruptcy Rules 2002, 6004 And 6006,
Free And Clear of All Liens, Claims, Interests and Encumbrances, (B) Approving
the 	Bidding 	Procedures 	to 	Solicit 	Higher 	and 	Better 	Offers 	and 	Select 	the
Successful Bidder1, and (C) Approving the Form of Asset Purchase Agreement and
Sale 	Order 	(the 	“Sale 	Motion”, 	Bankr. 	Case 	No. 	22-01676, 	dkt. 	#1317), 	as
thereafter supplemented (Bankr. Case No. 22-01676, dkt. #1383, 1570).
5. 	On February 22, 2024, the Debtor filed Schedules A and 1.2(b) to
the 	Asset 	Purchase 	Agreement 	by 	and 	between 	Debtor 	and 	Purchaser 	(“APA”)
“respectively 	consisting 	of 	a 	list 	of 	the 	ownership 	matrix 	of 	the 	deeded
intervals at the ESJ Towers Condominium reflecting those owned by Debtor and
the list of Debtor’s personal property, both to be sold by Debtor under the
APA” (Bankr. Case No. 22-01676, dkt. #1570, p. 2). The court notes that Schedule
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A 	discloses 	certain 	intervals 	allegedly 	owned 	by 	Plaintiff 	Magdy 	Mikhail,
Intervals 1567-28 and 1771-01 (id., dkt. #1570-1, pp. 114 and 119).
6. 	On 	March 	12, 	2024, 	the 	court 	entered 	an 	Order 	Approving 	the
Disclosure Statement (Bankr. Case No. 22-01676, dkt. #1642). See also Amended
Disclosure Statement (Bankr. Case No. 22-01676, dkt. #1270).
7. 	On March 21, 2024, the court entered an Order Approving The Amended
Bidding 	Procedures 	To 	Solicit 	Higher 	And 	Better 	Offers 	And 	Select 	The
Successful Bidder, For The Sale Of Debtor’s Assets (“Amended Bidding Procedures
Order”, Bankr. Case No. 22-01676, dkt. #1669), which states, in pertinent part,
as follows:
… Debtor shall file with the Court a schedule of cure obligations
for 	the 	Assumed 	Contracts 	that 	are 	being 	made 	available 	to 	the
Purchaser for potential assumption and assignment (a “Contract and
Cure Schedule”) and shall include the same with the service of the
Cure 	Notice. 	The 	Contract 	and 	Cure 	Schedule 	shall 	include 	a
description of each Assumed Contract to potentially be assumed and
assigned under the APA and the Cure Costs, if any, necessary to
cure 	such 	Assumed 	Contracts 	pursuant 	to 	Section 	365 	of 	the
Bankruptcy 	Code. 	A 	copy 	of 	the 	Cure 	Notice, 	together 	with 	the
Contract and Cure Schedule, shall be served by first-class mail to
each 	of 	the 	nondebtor 	parties 	listed 	on 	the 	Contract 	and 	Cure
Schedule, within five (5) days from entry of this Order. As soon as
practicable after the receipt of a Qualified Bid (which is due by
the 	Bid 	Deadline) 	seeking 	the 	assumption 	and 	assignment 	of 	an
executory contract or unexpired lease of the Debtor not listed on
the Contract and Cure Schedule (any such contracts, “Alternative
Bidder Contracts”), Debtor shall file notice of such change with
the 	Court 	and 	serve 	upon 	each 	affected 	counterparty 	of 	the
applicable 	Alternative 	Bidder 	Contracts 	the 	Cure 	Notice 	and 	the
amount of any Cure Costs associated with such Alternative Bidder
Contracts.
Any objections to any proposed Cure Costs for any Assumed Contract
(any 	such 	objection, 	a 	“Cure 	Objection”, 	and 	any 	such 	disputed
costs, 	“Disputed 	Cure 	Costs”) 	or 	to 	the 	provision 	of 	adequate
assurance 	of 	future 	performance 	under 	any 	Assumed 	Contracts 	(an
“Adequate Assurance Objection”), must be in writing and filed with
the Court and served on the Notice Parties so as to be received no
later than thirty (30) days after the Mailing Deadline; provided,
however, counterparties to Alternative Bidder Contracts shall have
until the start of the Sale Hearing to file and serve any objections
to the assumption and assignment of an Alternative Bidder Contract.
If no timely Cure Objection or Adequate Assurance Objection is filed
and served with respect to an Assumed Contract or Alternate Bidder
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Contract, then (a) the Cure Costs identified in the Contract and
Cure 	Schedule 	with 	respect 	to 	the 	Assumed 	Contracts 	will 	be 	the
only amounts necessary under Section 365(b) of the Bankruptcy Code
to 	cure 	all 	monetary 	defaults 	under 	such 	Assumed 	Contracts 	or
Alternate 	Bidder 	Contract 	if 	the 	Purchaser 	(or 	other 	Successful
Bidder) ultimately decides to have the applicable Assumed Contract
or Alternate Bidder Contract assumed and assigned to it; (b) the
Successful Bidder will be deemed to have provided adequate assurance
of 	future 	performance 	under 	the 	applicable 	Assumed 	Contract 	in
accordance with Section 365(f)(2)(B) of the Bankruptcy Code if the
Purchaser (or other Successful Bidder) ultimately decides to have
the applicable Assumed Contract assumed and assigned to it; and (c)
the 	party 	failing 	to 	timely 	file 	a 	Cure 	Objection 	or 	Adequate
Assurance 	Objection 	shall 	be 	forever 	barred 	from 	asserting 	such
objections against the Debtor, its estate or the Successful Bidder.
…
The failure of any objecting person or entity to timely file its
objection 	to 	the 	Sale 	and 	related 	relief 	shall 	be 	a 	bar 	to 	the
assertion, at the Sale Hearing or thereafter, of any objection to
the Sale Motion, or to the consummation and performance of the Sale
contemplated by the APA, including the transfer of the Sale Assets
to 	the 	Successful 	Bidder 	free 	and 	clear 	of 	all 	liens, 	claims,
encumbrances and other interests.
Id., 	pp. 	3-6, 	¶¶ 	11-17, 	lines 	26-7. 	See 	also 	Second 	Amended 	Joint 	Motion
Submitting Amended Bidding Procedures to Solicit Higher and Better Offers and
Select the Successful Bidder, for the Sale of 	Debtor’s 	Assets and Proposed
Order Approving the Same, Bankr. Case No. 22-01676, dkt. #1663.
8. 	On March 22, 2024, the Debtor filed a Motion to Inform (Bankr. Case
No. 22-01676, dkt. #1674) whereby Debtor informs that “there is no ‘Contract
and Cure Schedule’ [as outlined in the Amended Bidding Procedures Order] to be
filed as the only contracts which are being made available to the Purchaser
for potential assumption and assignment are the contract with Liberty Cable
Vision of Puerto Rico for telephone and cable services and those with vacation
club members as to which there is no cure obligations” (id., ¶ 2) (boldface
added).
9. 	In 	accordance 	with 	the 	Amended 	Bidding 	Procedures 	Order, 	the
approved Sale Notice was published in two newspapers of general circulation in
Puerto Rico, El Vocero and El Nuevo Dia, and served on the UCC, inter alia.
See Amended Motion to Inform, Bankr. Case No. 22-01676, dkt. #1678. The approved
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Sale 	Notice 	states 	that 	any 	objection 	to 	the 	Sale 	Motion, 	including 	the
objection to the proposed assumption and assignment of Assumed Contracts, or
adequate 	assurance 	of 	future 	performance, 	shall 	be 	made 	by 	the 	applicable
objection deadline.
10. 	On May 21, 2024, after various procedural events and negotiations
between the Debtor and objecting parties1 , the court entered an Order Confirming
The 	Second 	Amended 	Chapter 	11 	Plan, 	As 	Supplemented 	(“Confirmation 	Order”,
Bankr. 	Case 	No. 	22-01676, 	dkt. 	#1838), 	which 	states 	in 	pertinent 	part 	as
follows:
(AA) 	Executory 	Contracts 	and 	Unexpired 	Leases. 	The 	Debtor 	has
exercised its business judgment in determining whether to assume
and assign or reject each of the Debtor’s executory contracts and
unexpired leases as set forth in Section 8.1 of the Plan. Each party
to an executory contract or unexpired lease to be assumed by the
Debtor 	and 	assigned 	to 	the 	Purchaser 	of 	the 	Debtor’s 	assets 	has
been 	provided 	with 	sufficient 	notice 	under 	the 	circumstances 	of
such assumption. Each assumption and assignment, or rejection of an
executory contract or unexpired lease as provided under Section 8.1
of the Plan shall be legal, valid, and binding upon the Debtor and
all 	non-Debtor 	parties 	to 	such 	executory 	contract 	or 	unexpired
lease.
…
10. 	Sale of the Debtor’s Assets to the Successful Bidder. The …
assumption 	by 	the 	Debtor 	of 	the 	contracts 	assumed 	during 	the
Bankruptcy Case (the “Assumed Contracts”), the assignment by the
Debtor to the Successful Bidder of the Assumed Contracts, and the
rejection 	by 	the 	Debtor 	of 	any 	executory 	contract 	that 	does 	not
constitute 	Assumed 	Contracts 	is 	hereby 	approved 	pursuant 	to
Sections 	363, 	365, 	1123(a)(5), 	1123(b)(4), 	and 	1146(a) 	of 	the
Bankruptcy Code, and the Debtor and the Successful Bidder are hereby
authorized and directed to take any and all necessary actions to
consummate the sale of all of the Debtor’s assets to be sold to the
Successful Bidder.
Id., pp. 10-11, ¶ (AA); p. 15, ¶ 10 (boldface added).
11. 	Paragraphs 	8.1 	and 	8.2 	of 	the 	confirmed 	Second 	Amended 	Plan 	As
Supplemented for ESJ Towers, Inc. (the “Plan”, Bankr. Case No. 22-01676, dkt.
#1838-1) further state as follows:
8.1 REJECTION OF EXECUTORY CONTRACTS
1 See, e.g., Minutes of [Confirmation] Hearing Held on May 15, 2024, Bankr. Case No. 22-01676, dkt. #1826.
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All unexpired leases, executory contracts and other contracts set
forth in Exhibit G to the Disclosure Statement, which (i) have not
expired by their own terms on or prior to the Confirmation Date,
(ii) have not been assumed and assigned to the purchaser of Debtor’s
assets, as indicated in the APA, prior to the Effective Date, shall
be deemed rejected.
8.2 REJECTION DAMAGE CLAIMS
If 	the 	rejection 	of 	an 	executory 	contract 	or 	unexpired 	lease
pursuant to Section 8.1 hereof results in a claim for damages to
the other party or parties to such contract or lease, any claim for
such damages, if not evidenced by a filed proof of claim, shall be
forever barred and shall not be enforceable against Debtor, or its
properties 	or 	agents, 	successors, 	or 	assigns, 	unless 	a 	proof 	of
claim is filed with the Bankruptcy Court and served upon counsel
for Debtor or the Reorganized Debtor on or before forty–five (45)
days following the Confirmation Date. Debtor retains the right to
object to any rejection damage claim filed in accordance with this
Section.
Id., p. 23, ¶¶ 8.1-82 (boldface added).
12. 	On June 6, 2024, after various procedural events, the court held
a hearing on the approval of the sale of Debtor’s assets. The sale hearing
minutes reflect that “Counsel for Debtor informed the court that the Proposed
Sale Order is consensual and that there are no objections – either in writing
or verbal – thereto. The court noted that there are no objections in the case
docket. Consequently, Counsel for Debtor requested that the court approve the
sale 	and 	the 	Proposed 	Sale 	Order 	in 	light 	of 	the 	confirmed 	Plan, 	which 	is
predicated on the sale of Debtor’s assets.” Bankr. Case 	No. 22-01676, dkt.
#1864, p. 2, lines 5-10. The sale hearing minutes also reflect that “Counsel
for Fortaleza … stated that Fortaleza Equity Partners 2 will sign the Asset
Purchase Agreement over to Fortaleza ESJ, a separate entity whose members and
owners are the same as those of Fortaleza Equity … ” (id., p. 2, lines 15-17).
13. 	On 	that 	same 	date, 	June 	6, 	2024, 	the 	court 	entered 	an 	Order
Approving Asset Purchase Agreement And Sale Of Debtor’s Assets, Pursuant To
Sections 	363 	And 	365 	Of 	The 	Bankruptcy 	Code, 	Free 	And 	Clear 	Of 	All 	Liens,
Claims, Interests And Encumbrances (the “Sale Order”, Bankr. Case No. 22-01676,
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dkt. #1863) for the sale of Debtor’s assets to Fortaleza Equity. Section 1.2(b)
of the APA attached to the Sale Order states that “the Leases and Contracts on
Schedule 1.2(a)” are “s[old], transfer[ed] and assign[ed] to the Purchaser”
and “Assumed Contracts”, as follows:
1.2 	… Seller shall sell, transfer and assign to the Purchaser,
and 	the 	Purchaser 	shall 	purchase 	and 	receive 	all 	of 	the 	Seller’
right, 	title 	and 	interest 	in, 	to 	and 	under 	any 	and 	all 	of 	the
assets, properties and rights of Seller (other than the Excluded
Assets) related to or used or held for use in connection with the
Realty as the same may exist as of the Closing (collectively, the
“Sale 	Assets”) 	free 	and 	clear 	of 	all 	Liens, 	mortgages, 	pledges,
Encumbrances, liabilities, charges of every kind, and any interest
thereto:
…
(b) the Leases and Contracts on Schedule 1.2(a) (the “Assumed
Contracts”)[2] , being understood that the Purchaser shall not
be 	required 	to 	assume 	any 	Lease 	or 	Contract 	and 	that 	any
assignment 	of 	a 	Lease 	or 	Contract 	to 	the 	Purchaser 	by 	the
Seller shall be at the sole discretion of the Purchaser and
subject 	to 	approval 	of 	the 	Bankruptcy 	Court. 	Assumed
Contracts 	shall 	include 	the 	Leases 	and 	the 	Contracts
identified in Schedule 1.2(a), and any Leases or Contracts
the 	Purchaser 	later 	advises 	the 	Seller 	it 	wishes 	to 	have
assigned 	to 	the 	Purchaser 	at 	least 	five 	(5) 	Business 	Days
prior to the Closing, notwithstanding the Lease or Contracts’
initial exclusion from Schedule 1.2(a) (which schedule shall
be agreed upon by both Purchaser and Seller prior to Closing
and attached to the final Agreement)[.]
Bankr. Case No. 22-01676, dkt. #1863, p. 20 (boldface added). 	Section 2.1(b)
of the APA clarifies that “[a]ll Leases and Contracts that are not Assumed
Contracts” 	are 	“Excluded 	Assets”, 	which 	are 	not 	“s[old], 	transfer[ed], 	or
assign[ed] or convey[ed] … to the Purchaser”. 	Id., p. 23. 	Lastly, Section
6.12(e) of the APA further states that “Schedule 1.2(b)[3] sets forth a list of
all Assumed Contracts. In the event the Purchaser identifies a Contract not
2 The court notes that the term “Assumed Contracts” also includes “those Contracts and Leases identified on
Schedule 1.2(b)”, which are “to be attached to the final Agreement, it being understood that the Purchaser shall not
be required to assume any Contract or Lease and that any assignment of a Contract or Lease to Purchaser by the
Seller shall be at the sole discretion of the Purchaser and subject to approval of the Bankruptcy Court. Assumed
Contracts shall include the Leases, and any Contracts the Purchaser later advises the Seller it wishes to have assigned
to the Purchaser [and the Purchaser accepts them], notwithstanding the Contracts initial exclusion from Schedule
1.2(b).” Id., p. 58 (boldface added).
3 Ibid.
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listed 	on 	Schedule 	1.2(b), 	then 	the 	Seller 	shall 	amend 	Schedule 	1.2(b) 	to
include such Contracts. To the best of the Seller’s knowledge all of the Assumed
Contracts are valid, binding and enforceable in accordance with their terms,
and are in full force and effect.” Id., p. 35.
14. 	On June 11, 2024, Debtor filed a Motion Submitting List of Assumed
Vacation Club Membership Agreements (the “Assumed Contracts List”), submitting
Schedule 1.2(a) and “reflecting the … Vacation Club Members assigned by Debtor
to [ESJ Tower Vacation Club, LLC] and assumed thereby, as to which there was
no default to be cured by Debtor.” 	Bankr. Case No. 22-01676, dkt. #1879, ¶ 7;
dkt. #1882, ¶ 7 (correcting name of assignee). See also dkt. #76, p. 3, fn. 1
(correcting name of assignee). Intervals 1264-29 and 1467-30 are not included
in the Assumed Contracts List. See Bankr. Case No. 22-01676, dkt. #1879, 1882.
15. 	On May 28, 2025, the court granted as unopposed the Approved Post-
Confirmation Modification of Confirmed Chapter 11 Plan, as Supplemented (the
“PCM”) jointly filed by the Debtor and the UCC. See Bankr. Case No. 22-01676,
dkt. #2003, 2011. The court notes that the PCM does not alter the portions of
the Plan or Confirmation Order relevant here.
16. 	The record of the bankruptcy case does not reflect that Plaintiffs
filed proofs of claim. See Claims Register, Bankr. Case No. 22-01676.
(B) 	The Adversary Proceeding, Adv. Proc. No. 25-00005
17. 	On January 30, 2025, Plaintiffs filed an adversary proceeding (dkt.
#1) against the Defendants. Fortaleza and Black Briar filed motions to dismiss
the original complaint (dkt. #14, 15, 18), which were denied without prejudice
to refiling the same as to the Amended Complaint, infra. See dkt. #59, 60, 61.
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18. 	On 	April 	29, 	2025, 	Plaintiffs 	filed 	an 	Amended 	Complaint 	(dkt.
#25)4 alleging, inter alia, that Fortaleza and Black Briar “have obstructed
payments from Plaintiffs and the use of valid and enforceable vacation club
membership rights” following the sale 	(id., ¶ 22); that the sale “was premised
on the understanding that timeshare memberships would not be disturbed by the
sale … which was made clear by the [Amended Bidding Procedures Order]”; that
“assuming, in arguendo, that the Court had not specifically provided for the
preservation and continuation of vacation club memberships upon the sale, which
is denied, the [Assumed Agreements List] is still irrelevant and has no bearing
or effect over the membership rights of Plaintiffs” for it “does not [] comply
with 	the 	statutory 	or 	procedural 	requirements 	of 	Section 	365 	for 	contract
rejection … [or] with rejection of timeshare rights under 11 USCS 365(h)(2)”
(id., ¶¶ 30-32); and lack of notice (id., ¶ 33).
The Amended Complaint pleads four (4) counts:
a. 	First, 	judgment 	declaring 	that 	(a) 	the 	Agreements 	were 	not
rejected; (b) the Assumed Agreements List is irrelevant and of no
consequence to the rights of Plaintiffs; (c) the Agreements were
not terminated; (d) the Agreements remained valid and enforceable
at the time of the sale and to the filing of the Amended Complaint;
(e) Defendants failed to comply with the Bidding Procedures Order
and 	Sale 	Order 	by 	failing 	to 	preserve 	and 	respect 	Plaintiffs’
rights under the Agreements, when the sale of assets was subject
to 	the 	rights 	of 	vacation 	club 	members 	like 	Plaintiffs; 	(f)
Defendants’ attempts at cancellation or termination of Plaintiffs’
rights are inconsistent with the Bidding Procedures Order and Sale
Order’s mandate to protect vacation club members’ rights.
b. 	Second, Defendants be held in civil contempt for willful violation
of 	the 	Bidding 	Procedures 	Order, 	the 	Sale 	Order, 	and 	the
Confirmation Order, and sanctions imposed, including daily fines,
until 	compliance 	is 	restored; 	Fortaleza 	and 	the 	Black 	Briar 	be
ordered 	to 	reinstate 	Plaintiffs’ 	membership 	rights 	immediately,
prohibited from obstructing payments from Plaintiffs, canceling or
otherwise 	interfering 	with 	Plaintiffs’ 	vacation 	club 	membership
rights, and/or denying Plaintiffs access to their vacation club
privileges in violation of the Agreements and orders.
4 Leave to file the amended complaint was granted as unopposed on May 30, 2025 (dkt. #24, 56).
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c. 	Third, 	Defendants 	acknowledge, 	respect, 	and/or 	reinstate
Plaintiffs’ 	vacation 	club 	membership 	rights, 	be 	permanently
enjoined from obstructing payments from Plaintiffs, canceling or
otherwise 	interfering 	with 	Plaintiffs’ 	vacation 	club 	membership
rights denying Plaintiffs access to their vacation club privileges
in violation of the Agreements and orders
d. 	Fourt, attorneys’ fees and costs.
19. 	On June 13, 2025, the ESJ Towers Vacation Club, Fortaleza ESJ, and
Fortaleza Equity Partners, and Fortaleza Hospitality filed a Motion to Dismiss
Amended Complaint pursuant to Fed. R. Civ. P. 12(b)(6) (dkt. #75) averring that
“Club Membership Agreements not included in [the Assumed Contracts List] were
… not assumed by Fortaleza ESJ [] as part of the Sale, and, thus, were deemed
expressly rejected pursuant to the language of the Plan” (id., pp. 5-6), and
that:
Plaintiffs have not stated a claim against Fortaleza in which relief
may be granted inasmuch as Fortaleza, as the Purchaser of Debtor’s
assets, did not assume Plaintiffs’ Club Membership Agreements under
the 	Sale 	and, 	thus, 	does 	not 	have 	any 	obligations 	to 	Plaintiffs
regarding the rejection or whatever alleged breach of their Club
Membership 	Agreements. 	The 	confirmation 	of 	the 	Sale 	is 	binding
pursuant to Section 1141(a) and all prior obligations and rights of
parties are extinguished and replaced by the Plan. Furthermore, the
confirmation of the Plan constitutes res judicata, which precludes
Plaintiffs 	from 	bringing 	any 	cause 	of 	action 	against 	Fortaleza
regarding 	the 	supposed 	“non-rejection” 	of 	Plaintiffs’ 	Club
Membership 	Agreements 	and/or 	any 	allegations 	purporting 	to 	make
Fortaleza responsible for any breach of alleged rights under such
agreements. 	This 	Court 	should, 	therefore, 	dismiss 	all 	of
Plaintiffs’ claims to those effects as included in Counts I, II,
III and IV of the Amended Complaint
id., 	p. 	7. 	Fortaleza 	further 	argues 	that 	the 	Assignment 	and 	Assumption
Agreement by and between Fortaleza ESJ (as Assignor) and ESJ Tower Vacation
Club (as Assignee) dated as of June 20, 2024 whereby the former assigned all
rights and obligations of the Club Membership Agreements acquired by it under
the APA to the latter (dkt. #77-1) did not include the Agreements for Intervals
1264-29 and 1467-30, ergo: Fortaleza did not acquire the same as part of the
sale. 	Thus, 	any 	allegations 	regarding 	the 	supposed 	“non-rejection” 	of 	the
Agreements as part of the Sale or the “invalidity” of Schedule 1.2(a), as well
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as allegations regarding Debtor’s obligations thereunder, its terms, validity
and/or 	enforceability 	and/or 	any 	breach 	of 	such 	agreements 	cannot 	be 	made
against Fortaleza and, moreover, constitute res judicata.
20. 	Also 	on 	June 	13, 	2025, 	Fortaleza 	Hospitality 	filed 	a 	Motion 	to
Dismiss Amended Complaint pursuant to Fed. R. 	Civ. P. 	12(b)(6) 	(dkt. #76),
averring that it “is an entity formed on April 2024 that was not utilized for
any business purposes until 2025”, “was not part of the Main Case nor was it
involved in the APA or the Sale and is not currently the owner of the Club
Membership Agreements. To this effect, the Amended Complaint does not plead or
allege anything specific or that could potentially be construed as an action
or omission by Fortaleza Hospitality against Plaintiffs, especially given the
fact that the entity is not operating.” Id., p. 3.
21. 	On July 14, 2025, Plaintiffs filed an Opposition to Fortaleza’s
Motion 	to 	Dismiss 	Amended 	Complaint 	(dkt. 	#81) 	objecting 	to 	the 	use 	of
“insufficient, unauthenticated extrinsic evidence, and apparent controversies
of fact … including as to the Assignment and Assumption Agreement” (id., p.
3), and stating that “vacation club memberships are not ordinary contracts to
be assumed or rejected, but passed through the bankruptcy process undisturbed”
(id., p. 8).
22. 	The court ordered Fortaleza to file a reply, if any, to Plaintiffs’
opposition. See dkt. #83.
23. 	On June 15, 2025, Plaintiffs requested entry of default pursuant
to Fed. R. Civ. P. 55 against Black Briar (dkt. #84) and Debtor (dkt. #86).
24. 	On July 16, 2025, Black Briar filed a Motion to Dismiss pursuant
to Fed. R. Civ. P. 12(b)(6) (dkt. #88) whereby Black Briar Advisors argues
that pursuant to a Management Agreement by and between it and Debtor (dkt.
#18-1), Black Briar Advisors’ role was strictly administrative and operational;
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that the decisions concerning termination of timeshare memberships did not fall
within the scope of "routine management" and solely Debtor’s responsibility;
and that 	“[a]ny actions taken after 	May 2024, 	including the termination 	of
timeshare memberships in or around June 2024, had absolutely nothing to do with
Black Briar Advisors and cannot be attributed to them … because they had been
terminated 	previously 	thereto” 	(dkt. 	#88, 	p. 	6). 	In 	the 	alternative, 	the
Management 	Agreement 	contains 	robust 	indemnification 	language 	which 	shields
Black Briar Advisors from liability for actions performed within the scope of
its duties, unless due to gross negligence or willful misconduct, neither of
which is alleged. They also argued that Debtor is required to indemnify Black
Briar Advisors for claims resulting from Debtor’s failure to honor business
arrangements or obligations existing before termination and any failure after
termination 	by 	ESJ 	Towers 	to 	fulfill 	or 	correct 	operational 	or 	membership-
related errors, and that Black Briar Advisors is an independent contractor. In
turn, Black Briar Puerto PR argues it had not commenced operations when the
alleged wrongful terminations of timeshare memberships occurred, hiring its
first employees on June 12, 2024, one day after the closing of the sale. Black
Briar PR alleges it does not have any contractual relationship with Plaintiffs,
nor any duty (legal or fiduciary) to any of the timeshare owners during the
relevant period of time.
25. 	On July 18, 2025, the Debtor filed an Opposition to Request for
Entry of Default and Motion to Dismiss the Complaint (dkt. #90, 94), whereby
it argues inadvertent calendaring error and excusable neglect under Fed. R.
Civ. P. 6(b)(1)(B) and joins Black Briar’s motion to dismiss .
26. 	On July 28, 2025, Fortaleza filed a Reply to Plaintiffs’ Opposition
to Fortaleza’s Motions[sic] to Dismiss the Amended Complaint (dkt. #93) arguing
that Plaintiffs failed to provide a response to the arguments of law raised in
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the motion to dismiss, to wit: “(1) that Fortaleza, as the Purchaser of Debtor’s
assets, did not assume Plaintiffs’ Club Membership Agreements under the sale
of the purchased assets as described in Docket No. 1838, p. 10 of the Main
Case 	and, 	thus, 	does 	not 	have 	any 	obligations 	to 	Plaintiffs 	regarding 	the
rejection or whatever alleged breach of their Club Membership Agreements; (2)
the confirmation of said sale is binding pursuant to Section 1141(a) and all
prior obligations and rights of parties are extinguished and replaced by the
Chapter 11 Plan (the “Plan”); and (3) the confirmation of the Plan constitutes
res 	judicata, 	which 	precludes 	Plaintiffs 	from 	bringing 	any 	cause 	of 	action
against Fortaleza regarding the supposed “non-rejection” of Plaintiffs’ Club
Membership 	Agreements 	and/or 	any 	allegations 	purporting 	to 	make 	Fortaleza
responsible 	for 	any 	breach 	of 	alleged 	rights 	under 	such 	agreements 	or 	the
bankruptcy process in general” (id., p. 3, ¶ 5).
27. 	On August 18, 2025, Plaintiffs filed an Omnibus Opposition to the
Black Briar Defendants’ Motion to Dismiss and 	to Debtor’s Joinder and Sur-
Reply 	to 	the 	Fortaleza 	Defendants’ 	Reply 	(dkt. 	#101) 	wherein 	they 	contend,
inter 	alia, 	that 	(i) 	Black 	Briar’s 	motion 	to 	dismiss 	refers 	to 	extrinsic
documents and materials, the Management Agreement, that cannot be considered
unless the motion is converted into one for summary judgment, (ii) the amended
complaint 	specifically 	alleges 	that 	Plaintiffs 	were 	not 	listed 	or 	notified
during the bankruptcy case or in the post-confirmation filings by Debtors, and
(iii) 	Plaintiffs’ 	claims 	do 	not 	rely 	on 	the 	terms 	or 	legal 	effect 	of 	the
Assignment and Assumption Agreement; rather, they assert that their rights were
violated irrespective of that document’s content. Should the amended complaint
be deemed insufficiently pleaded, Plaintiffs request leave to amend pursuant
to Fed. R. Civ. P. 15(a)(2).
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28. 	On September 8, 2025, Black Briar filed a Reply in Further Support
of Motion 	to Dismiss (dkt. 	#106) averring that the Management Agreement 	is
central to Plaintiffs’ theory of liability as to the duties and obligations
allegedly assumed and breached by Black Briar Advisors. Black Briar also argues
that to the extent the Plaintiffs claim that the Management Agreement is not
the source of the duties and obligations allegedly assumed and breached, then
the amended complaint must nevertheless be dismissed as it fails to state with
particularity what is the legal basis for holding that Black Briar owed a duty
towards Plaintiffs, which could have ostensibly been breached by the conduct
alleged in such amended complaint.
29. 	On 	October 	9, 	2025, 	Plaintiffs 	filed 	a 	Sur-Reply 	to 	BlackBriar
Defendant’s Reply in Further Support of Motion to Dismiss (dkt. #110).
APPLICABLE LAW AND ANALYSIS
(A) 	Entry of Default
As an introductory matter, the court will address Plaintiffs’ request
for entry of default against Black Briar and Debtor. Pursuant to Fed. R. Civ.
P. 55(c), an entry of default can be set aside for “good cause”. That standard
is a “liberal one” based upon the policy justification that actions should be
resolved on their merits. See Coon v. Grenier, 867 F.2d 73, 76 (1st Cir. 1989).
Such an analysis also applies to the circumstance here, where the court is
faced 	with 	a 	request 	for 	entry 	of 	default 	and 	the 	defendants 	have 	made 	an
appearance. See Avci v. Brennan, 232 F. Supp. 3d 216, 218 (D. Mass. 2017).
The deadline by which to respond having been missed only by a few days,
Black Briar and Debtor having appeared, admitted error, and filed motions to
dismiss, the court concludes that there is good cause to deny entry of default.
Plaintiffs’ requests for entry of default (dkt. #84, 86) are thus DENIED, and
the motions to dismiss allowed to be considered on the merits.
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(B) 	Motion to Dismiss Standard under Fed. R. Civ. P. 12(b)(6)
Fed. 	R. 	Civ. 	P. 	12(b)(6) 	is 	made 	applicable 	to 	adversary 	proceedings
through Fed. R. Bankr. P. 7012. In deciding a motion under Fed. R. Civ. P.
12(b)(6), 	the 	court 	must 	determine 	whether 	a 	complaint 	states 	a 	plausible
claim. “The purpose of a motion to dismiss under Fed. R. Civ. P. 12(b)(6) is
to assess the legal feasibility of a complaint, not to weigh the evidence which
the plaintiff offers or intends to offer.” In re Instituto Medico del Norte,
Inc., 2021 WL 4944085, at *2, 2021 Bankr. LEXIS 2924, at *7 (Bankr. D.P.R.
2021); Lugo Alejandro v. Betancourt (In re Betancourt), 2021 WL 438858, 2021
Bankr. LEXIS 298 (Bankr. D.P.R. 2021); Vélez Arcay v. Banco Santander de P.R.
(In 	re 	Vélez 	Arcay), 	499 	B.R. 	225, 	230 	(Bankr. 	D.P.R. 	2013), 	citing 	Ryder
Energy Distribution Corp. v. Merrill Lynch Commodities, Inc., 748 F.2d 774,
779 	(2nd 	Cir. 	1984); 	Citibank, 	N.A. 	v. 	K-H 	Corp., 	745 	F. 	Supp. 	899, 	902
(S.D.N.Y. 1990).
Fed. R. Civ. P. 8(a)(2), applicable to adversary proceedings through Fed.
R. Bankr. P. 7008, mandates complaints contain a “short and plain statement of
the claim showing that the pleader is entitled to relief.” “Although detailed
factual allegations are not required, the Rule does call for sufficient factual
matter”. Surita-Acosta v. Reparto Saman Inc. (In re Surita Acosta), 464 B.R.
86, 90 (Bankr. D.P.R. 2012). Therefore, to survive a Fed. R. Civ. P. 12(b)(6)
motion to dismiss, a complaint must contain sufficient factual matter that,
accepted as true, “state[s] a claim to relief that is plausible on its face.”
Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007). A claim has facial
plausibility when the pleaded factual 	content 	allows the court to draw the
reasonable inference that the defendant is liable for the misconduct alleged.
Id., at 556. The Twombly standard was further developed in Ashcroft v. Iqbal,
556 	U.S. 	622 	(2009), 	advising 	lower 	courts 	that 	“determining 	whether 	a
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complaint states a plausible claim for relief will ... be a context-specific
task that requires the reviewing court to draw on its judicial experience and
common sense.” Ashcroft, 556 U.S. at 679. “In keeping with these principles,
a court considering a motion to dismiss can choose to begin by identifying
pleadings that, because they are no more than conclusions, are not entitled to
the assumption of truth. While legal conclusions can provide the framework of
a complaint, they 	must be supported 	by factual allegations. When there are
well-pleaded factual allegations, a court should assume their veracity and then
determine whether they plausibly give rise to an entitlement to relief.” Id.,
at 679. In sum, allegations in a complaint cannot be speculative and must cross
“the line between the conclusory and the factual”. Peñalbert-Rosa v. Fortuño-
Burset, 631 F.3d 592, 595 (1st Cir. 2011). “[A]n adequate complaint must provide
fair notice to the 	defendants and state a facially plausible legal claim.”
Ocasio-Hernandez v. Fortuño-Burset, 640 F.3d 1, 11 (1st Cir. 2011).
In Schatz v. Republican State Leadership Committee, 669 F.3d 50, 55 (1st
Cir. 2012), the First Circuit established a two-step standard for motions to
dismiss under Fed. R. Civ. P. 12(b)(6). Step one: isolate legal conclusions.
Step two: take the complaint's well-pleaded (non-conclusory) allegations as
true, drawing all reasonable inferences in favor of the plaintiff and determine
if they plausibly narrate a claim for relief. See Pérez v. Rivera (In re Pérez),
2013 WL 1405747, at *3, 2013 Bankr. LEXIS 1561 (Bankr. D.P.R. 2013); Zavatsky
v. O'Brien, 902 F. Supp. 2d 135, 140 (D. Mass. 2012).
“Simply because the court is hesitant to dismiss a claim in the early
sta[g]es of litigation, however, does not mean that there are not circumstances
where the court can and should act. Fed. R. Civ. P. 12(b)(6) weeds out those
allegations that, even with further factual development, will never grow into
sustainable claims under the law.” Arruda v. Sears, Roebuck & Co., 273 B.R.
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332, 340 (D.R.I. 2002). As the First Circuit has stated, “in the menagerie of
the Civil Rules, the tiger patrolling the courthouse gates is rather tame, but
‘not entirely ... toothless.’ ” Correa v. Arrillaga, 903 F.2d 49, 52 (1st Cir.
1990), quoting Dartmouth Review v. Dartmouth College, 889 F.2d 13, 16 (1st Cir.
1989).
Consideration of a motion to dismiss requires the court to assume the
truth of all well-plead facts and give the benefit of all reasonable inferences
therefrom. A complaint that states a claim plausible on its face survives a
motion to dismiss. See Banco Santander P.R. v. P.R. Hosp. Supply, Inc. (In re
P.R. Hosp. Supply, Inc.), 617 B.R. 181, 191 (Bankr. D.P.R. 2020).
(C) 	Consideration of Extrinsic Evidence
At 	the 	motion 	to 	dismiss 	stage, 	“the 	Court 	may 	consider: 	[1]
‘implications 	from 	documents’ 	attached 	to 	or 	fairly 	‘incorporated 	into 	the
complaint,’ [2] ‘facts’ susceptible to ‘judicial notice,’ and [3] ‘concessions’
in 	a 	plaintiff's 	‘response 	to 	the 	motion 	to 	dismiss.’ 	” 	Nieto-Vicenty 	v.
Valledor, 984 F. Supp. 2d 17, 20 (D.P.R. 2013), quoting Schatz, 669 F.3d at
55-56. 	At the court's discretion, if it chooses to consider materials outside
of 	the 	pleadings, 	a 	motion 	to 	dismiss 	should 	be 	converted 	to 	a 	motion 	for
summary judgement under Fed. R. Civ. P. 56. See Trans-Spec Truck Serv., Inc.
v. Caterpillar Inc., 524 F.3d 315, 321 (1st Cir. 2008).
Under 	certain 	“narrow 	exceptions,” 	some 	extrinsic 	documents 	may 	be
considered without converting a motion to dismiss into a motion for summary
judgement. Freeman v. Town of Hudson, 714 F.3d 29, 36 (1st Cir. 2013), citing
Watterson v. Page, 987 F.2d 1, 3 (1st Cir. 1993). These exceptions include
“documents, the authenticity of which are not disputed by the parties; official
public 	records; 	documents 	central 	to 	plaintiffs’ 	claim; 	[and] 	documents
sufficiently referred to in the complaint.” Freeman, 714 F.3d at 36, quoting
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Watterson, 	987 	F.2d 	at 	3. 	“[I]t 	is 	well-established 	that 	in 	reviewing 	the
complaint, 	we 	‘may 	properly 	consider 	the 	relevant 	entirety 	of 	a 	document
integral to or explicitly relied upon in the complaint, even though not attached
to the complaint, without converting the motion into one for summary judgment.’
” Clorox Co. P.R. v. Proctor & Gamble Com. Co., 228 F.3d 24, 32 (1st Cir.
2000), citing Watterson, 987 F.2d at 3-4). See also Schatz, 669 F.3d at 55-56,
n. 3.
The (i) Assignment and Assumption Agreement (dkt. #77-1) and (ii) the
Management Agreement (dkt. #18-1) do not fit into these enumerated categories.
Accordingly, 	the 	court 	shall 	limit 	its 	evaluation 	of 	material 	outside 	the
complaint, noting only the order of assignments, and shall not apply a summary
judgment standard to the filings in this case. Consequently, this court takes
judicial notice under Fed. R. Evid. 201 that the Debtor sold its assets to
Fortaleza 	Equity 	pursuant 	to 	the 	APA, 	which 	Fortaleza 	Equity 	subsequently
“sign[ed] 	… 	over 	to 	Fortaleza 	ESJ” 	(Bankr 	Case 	No. 	22-01676, 	dkt. 	#1864).
Fortaleza ESJ then assigned all rights and obligations to the vacation club
membership 	agreements 	to 	ESJ 	Tower 	Vacation 	Club, 	LLC 	pursuant 	to 	the
Assignment and Assumption Agreement (dkt. #77-1).
(D) 	Discussion
Section 	365(a) 	of 	the 	Bankruptcy 	Code 	allows 	a 	debtor 	in 	possession,
subject to the court’s approval, to assume or to reject a prepetition executory
contract. See 	11 	U.S.C. 	§ 	365(a). 	The 	debtor-in-possession 	may 	make 	this
decision at any time prior to the confirmation of the plan, unless the court
orders 	otherwise 	upon 	request 	of 	the 	non-debtor 	contracting 	party. See 	11
U.S.C. § 365(d)(2). Pursuant to Section 1123(b) of the Bankruptcy Code, a plan
may, “subject to [11 U.S.C. § 365], provide for the assumption, rejection, or
assignment 	of 	any 	executory 	contract 	or 	unexpired 	lease 	of 	the 	debtor 	not
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previously 	rejected 	…”. 	11 	U.S.C. 	§ 	1123(b)(2). 	This 	latitude 	allows 	the
debtor-in-possession 	an 	opportunity 	to 	determine 	which 	of 	the 	prepetition
executory contracts are beneficial to the estate and which should be assumed
or rejected.
The Bankruptcy Code has long furnished special protections to lessees or
buyers of real property when the lessor or seller enters bankruptcy and seeks
to reject the lease or purchase agreement as an executory contract. See 11
U.S.C. § 365(h)-(j). In 1984, the U.S. Congress extended these protections to
owners of timeshare interests. See Bankruptcy Amendments and Federal Judgeship
Act of 1984, Pub.L. No. 98–353, §§ 401–404, 98 Stat. 333, 366–67 (1984). These
protections, as pertinent to timeshare agreements, are summarized as follows:
… when a bankrupt debtor seeks to reject a timeshare agreement as
an executory contract, the timeshare owner has two options. If the
timeshare 	owner 	is 	in 	possession 	or 	the 	term 	of 	the 	timeshare
interest has commenced, he may remain in possession of his timeshare
interest. 11 U.S.C. § 365(h)(2)(A)(ii), (i)(1). If he does so, he
can 	set 	off 	any 	damages 	caused 	by 	the 	debtor's 	post-rejection
nonperformance against any payments due to the debtor, including
deferred purchase price installments and annual maintenance fees.
Id. § 365(h)(2)(B), (i)(2)(A).
As 	an 	alternative, 	the 	timeshare 	owner 	can 	treat 	the 	timeshare
interest 	as 	terminated 	and 	file 	a 	claim 	for 	damages 	against 	the
bankruptcy estate. Id. § 365(h)(2)(A)(i), (i)(1).
In 	re 	Plaza 	Resort 	at 	Palmas, 	Inc., 	741 	F.3d 	269, 	286 	(1st 	Cir. 	2014) 	(so
noting) (Selya, J., dissenting).5 See also Bankruptcy Code Manual § 365:68 (May
2025).
5 In Plaza Resort, the majority decision of the Court of Appeal for the First Circuit discusses the formalities required
for the creation of individual property rights under the Puerto Rico Timeshare and Vacation Club Act, 31 L.P.R.A. §
1251, et seq., (repealed by Act No. 204-2016, 31 L.P.R.A. §§ 1891-1907d, known as the Puerto Rico Vacation
Ownership Act), and does not address timeshare agreements under the Bankruptcy Code. The dissenting judge, the
Hon. Judge Selya, opined that the majority erred in determining that the intervals at issue constituted real property. In
so doing, the dissenting judge also opined that the majority erred with respect to the broader question of the parties’
rights in bankruptcy, particularly 11 U.S.C. § 365(h)(2) and (i), which allow a debtor to reject timeshare agreements
and provide specific safeguards for timeshare buyers, summarized above.
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Here, pursuant to Paragraph 8.1 of the confirmed plan, “[a]ll unexpired
leases, executory contracts and other contracts … which (i) have not expired
by their own terms on or prior to the Confirmation Date, (ii) have not been
assumed and assigned to the purchaser of Debtor’s assets, as indicated in the
APA, prior to the Effective Date, shall be deemed rejected.” Bankr. Case No.
22-01676, dkt. #1838-1, p. 23, ¶ 8.1 (boldface added). Pursuant to Paragraph
8.2 of the confirmed plan, “if the rejection … results in a claim for damages
… any claim for such damages, if not evidenced by a filed proof of claim, shall
be forever barred and shall not be enforceable against Debtor, or its properties
or agents, successors, or assigns, unless a proof of claim is filed with the
Bankruptcy Court …” Id., ¶ 8.2 (boldface added).
The record does not reflect that the Agreements for Intervals 1264-29
and 1467-30 were formally assumed and/or assumed and assigned prior to plan
confirmation or as part of the sale of Debtor’s assets; that a proof of claim
was timely filed by Plaintiffs in accordance with the terms of the confirmed
plan; that Plaintiffs objected to either confirmation or the sale of Debtor’s
assets; 	or, 	that 	Plaintiffs 	petitioned 	the 	court 	for 	Debtor 	to 	assumed 	or
reject Intervals 1264-29 and 1467-30 within a specific time, or for adequate
assurance of future performance. The record does reflect that both confirmation
and 	the 	sale 	of 	Debtor’s 	assets 	was 	consensual; 	that 	if 	unexpired 	leases,
executory contracts and other contracts were not assumed and assigned prior to
the closing of the sale, such agreement was deemed rejected under the terms of
the Confirmation Order, the Plan, the Sale Order, and the APA. These facts,
taken together, evince that Intervals 1264-29 and 1467-30 were deemed rejected
under the terms of the confirmed plan, which has res judicata effect. See 11
U.S.C. § 1141(a).
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To the extent Counts I, II, III, and IV seek relief against the Debtor
in connection with the rejection of Intervals 1264-29 and 1467-30, which are
barred under the Amended Bidding Procedures Order, Paragraph 8.2 of the Plan,
the Confirmation Order, the Sale Order, and the APA, and the assets are no
longer property of the Debtor or the bankruptcy estate, they fail to state a
claim for which relief may be granted under Fed. R. Civ. P. 12(b)(6). As such,
Counts I, II, III, and IV are dismissed with respect to the Debtor.
The court will now address the relief requested against the non-debtor
third-parties based on this court’s orders, the Agreements, and the Puerto Rico
Vacation Ownership Act. To the extent Count I seeks relief against (i) Fortaleza
Equity, (ii) Fortaleza ESJ, and (iii) ESJ Tower Vacation Club in connection
with the rejection of Intervals 1264-29 and 1467-30, which are barred under
the 	Amended 	Bidding 	Procedures 	Order, 	Paragraph 	8.2 	of 	the 	Plan, 	the
Confirmation Order, the Sale Order, and the APA, they fail to state a claim
for which relief may be granted under Fed. R. Civ. P. 12(b)(6). As such, Count
I is dismissed with respect to (i) Fortaleza Equity, (ii) Fortaleza ESJ, and
(iii) ESJ Tower Vacation Club.
To the extent any remaining counts seek relief against non-debtor third-
parties, 	namely 	(i) 	Fortaleza 	Equity, 	(ii) 	Fortaleza 	ESJ, 	(iii) 	ESJ 	Tower
Vacation Club, (iv) Fortaleza Hospitality, (v) Black Briar PR, and (vi) Black
Briar Advisors on account of alleged contractual or statutory vacation club
membership rights under the Puerto Rico Vacation Ownership Act, this court is
moved 	to 	exercise 	its 	discretion 	to 	permissively 	or 	discretionally 	abstain
under 28 U.S.C. § 1334(c)(1). See In re Harland Corporation, 2025 WL 338052
(Bankr. D.P.R. 2025) (noting that abstention is appropriate where state law
predominates). 	The 	effect 	or 	lack 	thereof 	of 	any 	remaining 	counts 	on 	the
administration of the Debtor’s bankruptcy estate and/or the confirmed plan also
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moves this court to abstain. The foregoing does not bar Plaintiffs from pursuing
their claims against the non-debtor parties in accordance with Puerto Rico law.
CONCLUSION
For the reasons stated herein,
1. 	Counts I, II, III, and IV are dismissed against the Debtor under
Fed. R. Civ. P. 12(b)(6);
2. 	Count I is dismissed with respect to (i) Fortaleza Equity, (ii)
Fortaleza ESJ, and (iii) ESJ Tower Vacation Club under Fed. R. Civ.
P. 12(b)(6);
3. 	The court abstains from hearing Count I asserted by and against
non-debtor third parties under 28 U.S.C. § 1334(c)(1), that is,
(i) Fortaleza Hospitality, (ii) Black Briar PR, and (iii) Black
Briar Advisors; and
4. 	The court abstains from hearing Counts II, III and IV asserted by
and against non-debtor third parties under 28 U.S.C. § 1334(c)(1),
that is, (i) Fortaleza Equity, (ii) Fortaleza ESJ, (iii) ESJ Tower
Vacation Club, (iv) Fortaleza Hospitality, (v) Black Briar PR, and
(vi) Black Briar Advisors.
Judgment will be entered accordingly.
IT IS SO ORDERED.
In San Juan, Puerto Rico, this 24 th day of February 2026.
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