EDGAR ABNER REYES COLON

IN THE UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF PUERTO RICO
In re: 	:
:
EDGAR ABNER REYES COLON, 	: 	Case No. 06-04675 (GAC)
:
Alleged Debtor 	: 	Chapter 11 (Involuntary)
___________________________________:
:
DECISION AND ORDER
Banco 	Popular 	de 	Puerto 	Rico 	(“Banco 	Popular”) 	filed 	this
involuntary petition against the alleged debtor, Edgar Abner Reyes
Colon (“Reyes”), on November 22, 2006. 	On December 15, 2006, Reyes
filed 	a 	motion 	to 	dismiss, 	in 	which 	he 	alleged 	the 	existence 	of
more than twelve creditors and that Banco Popular was required to
join two additional creditors to maintain the petition pursuant to
11 U.S.C. § 303(b)(1). 	On December 18, 2006, Reyes was ordered to
file 	a 	list 	of 	creditors 	and 	to 	comply 	with 	Fed. 	R. 	Bankr. 	P.
1003(b). 	On December 28, 2006, Reyes filed the list of creditors
(dkt. 	#10). 	Based 	on 	the 	fact 	that 	Reyes 	has 	more 	than 	twelve
creditors, the Court granted Banco Popular the opportunity to join
additional 	creditors 	to 	maintain 	the 	petition, 	as 	required 	by 	11
U.S.C. § 303(b)(1). 	In spite of the ample opportunity given, Banco
Popular failed to join sufficient creditors and on March 27, 2007,
the Court entered an order dismissing the petition (dkt. #26).
In 	the 	order 	of 	dismissal, 	the 	Court 	stated 	that 	it 	did 	not
have 	evidence 	before 	it, 	from 	which 	it 	could 	conclude 	that 	the
petition was filed in bad faith, but granted Reyes the attorney’s
fees and expenses incurred in contesting the petition. 	The Court
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allowed 	Reyes 	twenty 	days 	to 	submit 	an 	application 	and 	allowed
Banco 	Popular 	ten 	days 	to 	oppose 	it, 	indicating 	that 	if 	no
opposition was filed, the application would be granted.
Three days after entry of the order of dismissal, Reyes sought
reconsideration, 	contending 	that 	the 	petition 	was 	filed 	in 	bad
faith 	(dkt. 	#28). 	Reyes 	also 	submitted 	a 	breakdown 	of 	the
attorney’s fees and expenses in the amount of $9,512.65. 	The Court
entered 	an 	order 	on 	April 	3, 	2007, 	granting 	Reyes’ 	request 	to
retain 	jurisdiction 	and 	allowing 	twenty 	days 	to 	file 	specific
allegations as to bad faith (dkt. #29). 	Reyes submitted the motion
on April 30, 2007 (dkt. #38).
Banco Popular filed a motion for reconsideration of the order
of 	dismissal 	on 	April 	9, 	2007 	(dkt. 	#32) 	and 	two 	supplementary
motions (dkts. #33 and #36). 	Reyes filed an answer (dkt. #37) and
Banco Popular filed a reply (dkt. #39).
In its motion for reconsideration of dismissal, Banco Popular
requests 	time 	to 	complete 	discovery 	and 	requests 	a 	hearing 	to
consider whether there are special circumstances that warrant entry
of 	an 	order 	for 	relief 	in 	spite 	of 	the 	existence 	of 	more 	than
twelve 	creditors 	and 	the 	failure 	to 	join 	three 	creditors 	in 	the
petition. 	Banco 	Popular 	contends 	that 	the 	Court 	committed 	a
manifest error of law by dismissing the case without affording it
the right to discovery and a trial on the merits.
Reyes contends that Banco Popular’s motion for reconsideration
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of 	the 	dismissal 	was 	untimely 	and 	that 	it 	does 	not 	satisfy 	the
criteria 	for 	reconsideration. 	Reyes 	also 	contends 	that 	Banco
Popular 	can 	not 	request 	reconsideration 	to 	raise 	arguments 	that
could 	and 	should 	have 	been 	raised 	prior 	to 	entry 	of 	the 	order 	of
dismissal.
DISCUSSION
Banco Popular seeks reconsideration of the order of dismissal
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 computing the time to act, the last day is not included
if it is a Saturday, Sunday or legal holiday. 	See Fed. R. Bankr.
P. 9006(a).
In the present case, the Court’s order of dismissal was entered
on 	March 	27, 	2007 	and 	the 	ten 	day 	period 	for 	seeking
reconsideration would have expired on Friday, April 6, 2007, but it
was 	a 	legal 	holiday, 	Good 	Friday, 	meaning 	that 	Monday, 	April 	9
would be the tenth day and the motion was filed on April 9. 	Thus,
the Court concludes that Banco Popular’s motion for reconsideration
of the dismissal was filed on a timely basis.
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
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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 	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)).
Notwithstanding, 	a 	motion 	to 	alter 	or 	amend 	a 	judgment 	under
Rule 	59(e) 	is 	“aimed 	at 	reconsideration, 	not 	initial
consideration.” 	F.D.I.C. v. World Univ. Inc., 978 F.2d 10, 16 (1st
Cir. 	1992). 	Accordingly, 	a 	party 	should 	not 	use 	it 	to 	“raise
arguments which could, and should, have been made before judgment
issued.” 	Id. 	Motions under Rule 59 may not be used to argue a new
legal theory. 	Bogosian v. Woloohojian Realty Corp., 323 F.3d 55,
72 (1st Cir. 2003). 	See also Nat’l Metal Finishing Co. v. Barclays
American/Commercial, Inc., 899 F.2d 119, 123 (1st Cir. 1999).
In 	this 	case, 	Banco 	Popular 	alleges 	that 	the 	Court 	committed
a 	manifest 	error 	of 	law 	by 	failing 	to 	grant 	it 	discovery 	and 	a
trial 	prior 	to 	dismissing 	the 	petition. 	The 	Court 	concludes,
however, 	that 	during 	the 	three 	months 	between 	the 	filing 	of 	the
creditor 	list 	and 	the 	dismissal 	of 	the 	petition, 	Banco 	Popular
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filed 	numerous 	motions, 	yet 	never 	alleged 	an 	exception 	to 	the
requirement 	that 	at 	least 	three 	creditors 	join 	the 	involuntary
petition. 	Moreover, even though Reyes directly alleged the failure
to 	join 	two 	additional 	creditors 	as 	a 	basis 	for 	dismissal, 	Banco
Popular did not allege an exception to the requirement at any time
between its filing of the petition, as a sole creditor, on November
22, 2006, and the dismissal four months later.
The 	Court 	concludes 	that 	the 	involuntary 	petition 	filed 	by
Banco Popular was insufficient on its face. 	Because Reyes has more
than twelve creditors, three petitioners were necessary to commence
the 	involuntary 	case. 	See 	11 	U.S.C. 	§ 	303(b)(1, 	2). 	Moreover,
during 	the 	three 	months 	from 	the 	filing 	of 	the 	list 	of 	creditors
and the dismissal of the petition, Banco Popular was unable to join
two other creditors to maintain the petition. 	Certainly, if Banco
Popular 	had 	another 	theory 	as 	to 	how 	the 	petition 	could 	be
maintained without the presence of two other creditors, it should
have raised this matter in response to the Court’s order granting
it time to join additional creditors. 	If Banco Popular had raised
the 	issue 	and 	not 	received 	a 	hearing, 	the 	Court 	agrees 	that 	it
would 	have 	constituted 	a 	manifest 	error 	of 	law. 	But, 	under 	the
circumstances, because Banco Popular failed to raise the argument
on 	a 	timely 	basis, 	the 	Court 	concludes 	that 	no 	error 	has 	been
committed. 	Accordingly, 	the 	motion 	for 	reconsideration 	will 	be
denied.
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ORDER
WHEREFORE 	IT 	IS 	ORDERED 	that 	Banco 	Popular’s 	motion 	for
reconsideration, 	as 	supplemented, 	shall 	be, 	and 	it 	hereby 	is,
DENIED.
IT IS FURTHER ORDERED that Reyes is granted attorney’s fees and
expenses 	in 	the 	amount 	of 	$9,512.65, 	assessed 	against 	Banco
Popular.
IT IS FURTHER ORDERED that Banco Popular is granted twenty (20)
days 	to 	file 	a 	reply 	to 	the 	motion 	submitting 	specification
allegations of bad faith (dkt. #38).
SO ORDERED.
San Juan, Puerto Rico, this 9th day of July, 2007.
S/Gerardo A. Carlo
______________________
Gerardo A. Carlo
U.S. Bankruptcy Judge
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