By The Star Staff
For the second time in less than a year, the Financial Oversight and Management Board has to fight lawsuits seeking to disqualify its local law firm O’Neill & Borges.
In a motion filed last Thursday, the oversight board alleged that a petition to disqualify its local firm contained “baseless allegations” from a lawyer who lost a previous case.
R&D Master Enterprises sued to disqualify O’Neill & Borges on Jan. 19. Their lawyer, Carlos Lamoutte, had failed in a similar suit because he lacked standing. R&D argued that O’Neill & Borges had conflicts of interest and could not represent the oversight board because it also represented a group of funds that acquired a $384 million commercial loan portfolio from Puerto Rico’s Economic Development Bank (EDB). R&D is one of the borrowers whose loans were the subject of that transaction.
When U.S. District Court Judge Laura Taylor Swain, who oversees Puerto Rico’s bankruptcy, dismissed Lamoutte’s suit, it paved the way for R&D Master Enterprises to sue as a creditor. But Swain also found that the EDB’s conduct had no connection to the Title III cases to ensure no other group could bring up the same issues successfully if it had standing.
According to the oversight board, “the motion recycles many of the same baseless allegations and meritless arguments that Lamoutte previously advanced.”
“It contains the same conclusory, unsupported, and erroneous allegations against [O’Neill & Borges], as well as the same misstatements of the disclosure requirements,” the board said.