By The Star Staff
The Financial Oversight and Management Board’s law firm in the commonwealth bankruptcy case, O’Neill & Borges, has acknowledged it represented New Fortress Energy LLC, a fuel supplier and the parent company of Genera, the private operator of the Puerto Rico Electric Power Authority (PREPA) legacy power plants.
The information is contained in a footnote to a legal opposition filed by O’Neill & Borges in which it called a company’s attempt to have the law firm disqualified as the oversight board’s legal representative because of ethical conflicts, a mere “smear campaign.”
Carlos Lamoutte, a lawyer, said O’Neill & Borges (O&B) represented New Fortress in a suit brought by the Sierra Club and Puente de Williamsburg to stop the construction of an LNG facility in San Juan. He did not know whether O&B was involved in helping New Fortress obtain or negotiate the contract to manage PREPA’s legacy power plants.
“But that contract is a conflictive one because it is one of PREPA’s largest contracts,” Lamoutte told the STAR.
Under the Puerto Rico Recovery Accuracy in Disclosures Act (PRRADA) of 2021, professionals are required to submit verified statements identifying their connection to parties identified in the List of Material Interested Parties (MIP List) involved in Puerto Rico’s bankruptcy. PRRADA was enacted six years after PROMESA and more than five years after R&D Master Enterprises sued to disqualify O’Neill & Borges on Jan. 19, after a similar motion by Lamoutte, the company’s lawyer, failed because he lacked standing.
R&D said O&B had illegal undisclosed conflicts of interest because in addition to representing the oversight, it 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, which the local government is trying to nullify.
“R&D Master opts to pursue the same tactics of innuendo, invective, illogical conclusions, and unsupported factual statements as to which it simply lacks any personal knowledge, to −once again− pursue its evident ultimate goal here, a declaration that the EDB Agreement is null and void ab initio,” O&B argued.
When the judge overseeing Puerto Rico’s bankruptcy, Laura Taylor Swain, dismissed Lamoutte’s suit, it left the door open for R&D Master Enterprises to attempt to disqualify O&B because of its condition as creditor to Puerto Rico, which prevents the court from dismissing the case for lack of standing.
Lamoutte filed a mandamus in court seeking to have the oversight board review the EDB loan contract, which, he said, the government has already declared fraudulent. He believes the oversight board has not acted because of O&B. After the lower court failed to act, the matter is before the U.S. First Circuit Court of Appeals in Boston, which has scheduled oral arguments in the case for March 9.
Separately, the EDB is also trying to nullify the agreement in the local courts. A hearing in the case is slated for April.
Meanwhile, Gov. Pedro Pierluisi Urrutia confirmed he canceled a contract with DLA’s Piper because the law firm assumed the legal representation of Venezuelan banker Julio Herrera Velutini, who has been charged with two others, including former Gov. Wanda Vázquez Garced, for corrupt acts. The governor said he wanted to avoid “the appearance of a conflict of interest.”