FRBSF Complaint in Intervention — OTO Analytics v. Benworth

Record facts

U.S. District Court for the District of Puerto Rico · No. 3:23-cv-01034-GMM · Doc. 127-7 · 2024-07-10 · Docket on CourtListener

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IN THE UNITED STATES DISTRICT COURT 
FOR THE DISTRICT OF PUERTO RICO 
 
OTO ANALYTICS, LLC, 
 
Plaintiff, 
 
v. 
 
BENWORTH CAPITAL PARTNERS PR LLC, 
BENWORTH CAPITAL PARTNERS LLC, 
BERNARDO NAVARRO and CLAUDIA 
NAVARRO, 
 
Defendants. 
 
 
 
Civil No. 23-01034 (GMM) 
 
 
 
 
 
 
 
FEDERAL RESERVE BANK OF SAN 
FRANCISCO,  
 
Plaintiff-Intervenor, 
 
v.  
 
OTO ANALYTICS, LLC, BENWORTH 
CAPITAL PARTNERS PR LLC, BENWORTH 
CAPITAL PARTNERS LLC, BERNARDO 
NAVARRO and CLAUDIA NAVARRO, 
 
Defendants in Intervention. 
 
 
 
COMPLAINT IN INTERVENTION 
 
TO THE HON. GINA MÉNDEZ MIRÓ 
UNITED STATES DISTRICT COURT JUDGE: 
 
The Federal Reserve Bank of San Francisco (the “Reserve Bank” or “Intervenor”), 
alleges:  
 
 
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NATURE OF ACTION1 
 
1) 
Intervenor Federal Reserve Bank of San Francisco (the “Reserve Bank”) seeks to 
intervene in this civil action filed by Plaintiff Oto Analytics, LLC (f/k/a Oto Analytics, Inc., d/b/a 
Womply) (“Womply”) against Defendants Benworth Capital Partners PR LLC, a Puerto Rico 
limited liability company (“Benworth PR”), Benworth Capital Partners LLC, a Florida limited 
liability company (“Benworth FL” and, together with Benworth PR, “Benworth”), Bernardo 
Navarro (“Mr. Navarro”), and Claudia Navarro (“Ms. Navarro” and, together with Mr. Navarro, 
the “Navarros” and, collectively with Benworth, the “Defendants”).  
2) 
As set out herein, the Reserve Bank seeks to intervene in this action to protect its 
properly perfected, valid first-priority security interests in assets held or transferred by Benworth 
FL, which secure nearly $70 million in defaulted debt obligations owed by Benworth FL to the 
Reserve Bank. Absent intervention, there is a material risk that the relief Womply seeks here would 
interfere with the Reserve Bank’s senior security interest and/or interfere with Benworth’s ability 
to continue to service the loan portfolio that comprises a central part of the Reserve Bank’s 
collateral. That result would be particularly inequitable given the serious questions that have been 
raised regarding Womply’s conduct as a service provider, and the allegations that Womply already 
has stymied Benworth’s ability to effectively service its loan portfolio. 
3) 
In order to protect these interests, the Reserve Bank seeks two primary forms of 
relief in connection with its intervention: First, the Reserve Bank seeks to assert its lien over the 
Defendants’ assets to the extent those assets constitute the Reserve Bank’s collateral; and second, 
the Reserve Bank seeks a declaration confirming (i) that it holds a security interest in any such 
assets of the Defendants, (ii) that Womply may only collect against such assets that are not 
 
1 Terms used but not defined herein have the meanings assigned to them in the Motion to Intervene Under Fed. R. 
Civ. P. 24 to which this Complaint in Intervention is attached. 
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collateral of the Reserve Bank, and (iii) that any recovery by Womply against the Defendants’ 
assets that do not constitute Reserve Bank collateral shall be on at least a pro rata basis with the 
Reserve Bank’s recovery against such assets. 
JURISDICTION AND VENUE  
 
4) 
This Court has already exercised jurisdiction over this action pursuant to 28 U.S.C. 
§ 1332(a)(1) and this Complaint in Intervention needs no additional jurisdictional basis. 
5) 
The Reserve Bank does not contest that venue is proper in this District pursuant to 
28 U.S.C. §§ 1391(b) and (c) because a substantial part of the events or omissions giving rise to 
the claims of the parties alleged in the Complaint filed by Womply in this action (ECF Nos. 1–3, 
as amended at ECF No. 123, the “Womply Complaint”) occurred in this District.INTERVENOR 
 
6) 
The Reserve Bank is part of the U.S. central bank system known as the Federal 
Reserve System. Its principal place of business is San Francisco, California. It serves the Twelfth 
District of the Federal Reserve System, which comprises nine western states and three territories.  
FACTUAL BACKGROUND 
 
A. The Reserve Bank and Benworth’s Relationship Under the PPPLF 
7) 
In March of 2020, in response to the Coronavirus (COVID-19) pandemic, 
the United States Congress passed the Coronavirus Aid, Relief, and Economic Security Act (the 
“CARES Act”) to provide fast and direct economic assistance for American workers, families, 
small businesses, and industries.  
8) 
The CARES Act established the Paycheck Protection Program (the “PPP”), which 
was implemented by the United States Small Business Administration (the “SBA”) with support 
from the Department of the Treasury. The PPP provided small businesses with funds to pay payroll 
costs and benefits, as well as interest on mortgages, rent, and utilities. 
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9) 
In April of 2020, to support the effectiveness of the PPP and the flow of credit to 
households and businesses, the Board of Governors of the Federal Reserve System, with the 
approval of the Secretary of the Treasury, authorized the establishment of the Paycheck Protection 
Program Liquidity Facility (the “PPPLF”), which extended credit to eligible financial institutions 
that originated PPP loans.  
10) 
Benworth FL was one such PPP-eligible lender. It obtained PPPLF financing 
pursuant to the Paycheck Protection Program Liquidity Facility Letters of Agreement dated May 
4, 2020, January 14, 2021, and January 30, 2023 (collectively, the “Letters of Agreement”).  
11) 
The Letters of Agreement incorporate the Reserve Bank’s Operating Circular 
No. 10 (as amended and supplemented from time to time, the “Operating Circular” and, together 
with the Letters of Agreement, the “Program Agreements”), which together set forth the relevant 
terms and conditions that govern Benworth FL’s relationship with the Reserve Bank. See the 
Program Agreements attached hereto as Exhibit A–B; see also Federal Reserve Bank of San 
Francisco v. Benworth Capital Partners LLC et al., Case No. 24-01313 (the “Reserve Bank 
Complaint”). 
12) 
Under the Program Agreements, Benworth FL was authorized to request credit 
advances (“Advances”) from the Reserve Bank. Those Advances were secured by PPP loans 
pledged as collateral to the Reserve Bank (the “Pledged PPP Loans”) and set to mature on the 
maturity dates of the Pledged PPP Loans, subject to the terms of the Program Agreements. Reserve 
Bank Compl. ¶ 21.2 
 
2 Specifically, the Reserve Bank has properly perfected, valid, first-priority liens on (i) “all [Benworth FL’s] rights, 
title, and interest in property (wherever located)” that is identified on a collateral schedule, identified on the Reserve 
Bank’s books and records as pledged to, or subject to a security interest, or that is in the possession or control of the 
Reserve Bank, (ii) “all documents, books and records, including programs, tapes, and related electronic data 
processing software, evidencing or relating to” the foregoing, and (iii) “all proceeds and products” of the foregoing, 
“including but not limited to interest, dividends, insurance, rents and refunds” (collectively, the “PPP Collateral”). Id. 
at 5 n.2. 
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13) 
The Reserve Bank filed a UCC Financing Statement in the state of Florida on 
May 11, 2020, to perfect its lien over the PPP Collateral (as defined below). See UCC Financing 
Statement attached hereto as Exhibit C; see also Reserve Bank Compl. ¶ 22. 
14) 
Notably, the PPP Collateral includes all “[p]roceeds and products” of the Pledged 
PPP Loans. This includes PPP borrower collections, payments received from the SBA for principal 
balances on account of loan forgiveness and guaranty purchase, and the interest paid by the PPP 
borrowers and SBA on the principal amount of the Pledged PPP Loans (which accrues at the rate 
of 1.00% per annum). Id. ¶ 23. 
15) 
Under the Program Agreements, upon the occurrence of an event of default, the 
maturity date of all Advances is accelerated and all Advances become due and owing. Id. ¶ 25. 
16) 
Unless otherwise provided under the Program Agreements, if a PPPLF borrower 
such as Benworth FL fails to pay an Advance on its maturity date, the Reserve Bank shall first 
seek repayment from realization on the PPP Collateral. To the extent of any deficiency of the 
collateral against the amount advanced, the Reserve Bank may thereafter pursue any other 
remedies available under the Program Agreements, including seeking payment directly from 
Benworth FL (i.e., the deficiency becomes a recourse obligation). Id. ¶ 26. 
17) 
However, if a PPPLF borrower such as Benworth FL “(i) has breached any of the 
representations, warranties, or covenants made under the [Program Agreements] or (ii) has 
engaged in any fraud or misrepresentation in connection with any Advance or any request to obtain 
an Advance under the PPPLF,” all Advances made to the PPPLF borrower immediately become 
recourse obligations, regardless of the value of the PPP Collateral. Id. ¶ 27. 
18) 
In addition, failure by a PPPLF borrower to meet any of the requirements of the 
Program Agreements, including if the PPP Collateral fails to satisfy the requirements for guaranty 
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purchase of PPP loans by the SBA, may, at the sole discretion of the Reserve Bank, void the non-
recourse provisions of the Program Agreements and any related provisions.3 The Reserve Bank’s 
rights therefore become full recourse with respect to the portion of any Advance equal to the 
amount of the valuation of the non-conforming PPP Collateral. Id. ¶ 28. 
19) 
When an obligation becomes recourse, the Reserve Bank may pursue various 
remedies “separately, successively, or concurrently,” including debiting the account of the PPPLF 
borrower’s correspondent, taking possession of its collateral, or “pursu[ing] any other remedy 
available to collect, enforce, or satisfy” any unpaid obligation against any of the borrower’s assets. 
Id. ¶ 29. 
20) 
On or about December 27, 2023, Benworth FL informed the Reserve Bank of 
certain developments impacting its financial position, including with respect to litigation 
proceedings it is involved in with Oto Analytics, LLC (d/b/a Womply) (“Womply”). Benworth FL 
acknowledged to the Reserve Bank at that time that it did not have access to sufficient funds to 
pay the Interim Award (as defined and discussed below), or any commensurate or larger final 
award that may be awarded. Id. ¶ 30. 
21) 
As a result of the foregoing and other facts disclosed by Benworth FL to the Reserve 
Bank, the Reserve Bank determined that various events of default had occurred under the Program 
Agreements. Id. ¶ 31. 
22) 
Events of default included, but were not limited to, (i) that the Reserve Bank 
“deem[ed] itself insecure with respect to the financial condition of” Benworth FL and Benworth 
FL’s ability to perform its obligations under the Program Agreements as provided for under the 
 
3 Under the PPP, the SBA agrees to guaranty PPP loans (through an agreement to purchase the loans) that have not 
been forgiven by the SBA or paid in full by the borrower, provided the lender has complied with SBA requirements 
and required lending practices. 
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Operating Circular, and (ii) Benworth FL’s Insolvency (as defined under the Operating Circular), 
in each case, based on Benworth FL’s inability to pay the Final Award and financial statements, 
reports, and other information disclosed by Benworth FL to the Reserve Bank. As a consequence 
of these events of default, the entire amount outstanding on Benworth FL’s Advances from the 
PPPLF has become due and owing. Id. ¶ 32. 
23) 
In addition, the Reserve Bank determined that Benworth FL had breached multiple 
representations, warranties, or covenants it made under the Program Agreements, causing the 
Advances to Benworth FL to become recourse obligations. These breaches included, but were not 
limited to, a breach of the representation that no event of default had occurred or was continuing, 
and a breach of the covenant to promptly notify the Reserve Bank when events of default occurred. 
As a result of these breaches, the amounts outstanding on all of Benworth FL’s Advances have 
become recourse obligations. Id. ¶ 33. 
24) 
Moreover, the Reserve Bank has become aware that Benworth FL has failed to 
comply with the terms of the PPP for at least some portion of the outstanding Pledged PPP Loans, 
which has caused Benworth FL’s outstanding Advances to become recourse obligations, 
independent of the aforementioned breaches of the Program Agreements representations, 
warranties, and covenants. In particular, the SBA has already denied over $60 million of Benworth 
FL’s requests for guaranty purchase of Pledged PPP Loans. Benworth FL has represented to the 
Reserve Bank that for a period of years, it did not have appropriate documentation to support its 
requests for guaranty purchases for all of the relevant PPP loans, either due to Womply’s 
withholding of the appropriate documentation, discussed below, or due to other problems internal 
to Benworth FL. These facts have caused the Reserve Bank to determine that Benworth FL has 
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failed to comply with the terms of the PPP for at least some portion of its PPP portfolio, causing 
the Advance amounts to become recourse. Id. ¶ 34. 
25) 
On February 27, 2024, the Reserve Bank memorialized and provided notice of the 
events of default and breached covenants that caused the Advances to become immediately due 
and payable and the obligations to become full recourse in a letter sent to Benworth FL (the 
“Default Notice”).4 See Default Notice attached hereto as Exhibit D; see also Reserve Bank 
Compl. ¶ 35. 
26) 
Pursuant to the Program Agreements, Benworth FL received Advances from the 
Reserve Bank from time to time in an aggregate principal amount of approximately $4.3 billion, 
secured by approximately 300,000 Pledged PPP Loans and the other PPP Collateral. Upon 
information and belief, Benworth FL processed, funded, and managed this loan portfolio, earning 
accrued interest income and various other fees in relation to those loans. Reserve Bank 
Compl. ¶ 36. 
27) 
As of July 10, 2024, the amount outstanding under the Program Agreements 
consists of an aggregate principal amount of $66,980,967.08, plus interest, and other fees, costs 
and reimbursable amounts under the Program Agreements. Id. ¶ 37. 
28) 
Benworth FL owns the Pledged PPP Loans. Upon information and belief, pursuant 
to Loan Servicing Agreements (“LSAs”) executed in 2021, Benworth PR services Benworth FL’s 
loans and provides other services such as fraud monitoring and loan forgiveness. Id. ¶ 54.  
 
4 Additionally, on or around June 14, 2024, to further protect its collateral and upon notice to Benworth FL, the 
Reserve Bank exercised its right to move Benworth FL to a “direct pay” structure whereby the SBA remits 
payments associated with loan forgiveness reimbursement and loan guarantee amounts for the Pledged PPP Loans 
directly to the Reserve Bank instead of Benworth FL. Payments made on the Pledged PPP Loans by PPP borrowers 
continue to be remitted to Benworth FL. 
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29) 
Upon information and belief, Womply’s failure to provide Benworth FL with 
certain requested loan files, as discussed below, has disrupted Benworth PR’s ability to effectively 
service the Pledged PPP Loans, and has impaired Benworth FL’s ability to promptly pay the 
amount currently due and owing to the Reserve Bank under the Program Agreements. 
B. Benworth’s Relationship with Womply 
i. 
Womply’s Provision of Services to Benworth and Allegations of Misconduct 
30) 
As alleged in the Womply Complaint, starting in February 2021, Benworth FL 
contracted to use Womply’s services related to the PPP loans originated by Benworth FL. Under 
the parties’ agreements, Benworth FL was to pay Womply certain fees for these services. Womply 
alleges it is owed approximately $200 million in unpaid fees and interest from Benworth FL.  
31) 
Womply has been publicly criticized in the past for failing to provide information 
to the federal government and has faced fraud allegations. As detailed in a December 2022 report 
by the Select Subcommittee on the Coronavirus Crisis,5 starting in May 2021, Womply refused to 
provide requested information to a lender, Fountainhead, and the SBA Office of Inspector General 
(the “SBA OIG”) to aid an investigation into potential fraud related to a group of Womply-referred 
loans. House Report at 52.  
32) 
The same report notes that “Womply also resisted providing data to Benworth to 
assist an SBA OIG investigation” in April of 2021. Id. at 54. When asked directly by the SBA OIG 
to provide the requested files, Womply “declined to provide the information to Benworth and 
directed the SBA OIG to fill out a web form on the ‘Contact Us’ section of Womply’s website.” Id. 
 
5 Select Subcommittee on the Coronavirus Crisis, “We Are Not the Fraud Police”: How Fintechs Facilitated Fraud 
in the Paycheck Protection Program (Dec. 2022) (the “House Report”). 
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33) 
 More recently, Womply agreed to pay $26 million to the Federal Trade 
Commission to settle charges related to deceptive acts or practices in connection with Womply’s 
advertising of PPP services to small business consumers.6 
34) 
According to Benworth, Womply has threatened the Reserve Bank’s secured 
interest by, for years, refusing to provide Benworth FL access to certain loan files that are necessary 
for the servicing of its PPP loan portfolio. Additionally, Womply seeks an attachment of the 
Defendants’ assets in its prayer for relief, which would directly impact the Reserve Bank’s secured 
interest in its collateral and also could directly interfere with Benworth’s ability to continue 
servicing the Pledged PPP Loans, further imperiling the value of the Reserve Bank’s collateral.  
ii. 
The Arbitration 
35) 
As set out in the Womply Complaint, on August 25, 2021, Womply commenced 
JAMS arbitration against Benworth FL in San Francisco, California (the “Arbitration”), seeking 
payment of unpaid fees that Benworth FL allegedly owes Womply under the parties’ agreements. 
36) 
On December 21, 2023, the arbitrator overseeing the Arbitration issued an interim 
award (the “Interim Award”) that, if finalized and not set aside, would require Benworth FL to pay 
Womply over $86 million on account of unpaid fees, plus contractual interest and Womply’s costs 
of collection of the debt. See ECF Nos. 99-1 and 100. The arbitrator concluded that Womply proved 
all elements of its breach of contract claims related to the payment of referral fees, Application 
Programming Interface (“API”) fees, and technology fees related to the services provided for the 
processing, management, and tracking of the large volume of PPP loans issued by Benworth FL to 
small businesses. Furthermore, the arbitrator concluded that Benworth FL did not prove any of its 
defenses. The arbitrator did not consider any arguments related to criticisms by the SBA of 
 
6 Federal Trade Commission v. Oto Analytics, Inc. and Toby Scammell, Stipulated Order for Permanent Injunction 
and Monetary Judgment, Case No. 24-CV-1661 (N.D. Cal. April 3, 2024). 
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Womply’s conduct in referring PPP loan applications to lenders such as Benworth FL, see supra 
note 5. 
37) 
Benworth FL informed the Reserve Bank that Womply has been in possession of 
numerous loan files related to Benworth FL’s PPP loan portfolio that it has failed to turn over to 
Benworth for a number of years (with requests for these documents dating back to 2021). Benworth 
FL informed the Reserve Bank that it requires these loan files in order to continue servicing loans. 
Benworth FL also stated that these files are necessary to process guaranty purchase applications 
that are pending or are on appeal with the SBA with respect to the Pledged PPP Loans, and to make 
new guaranty purchase requests.  
38) 
The prompt resolution of the guaranty purchase applications before the SBA is of 
particular importance, as the SBA will only provide payment to Benworth on a given PPP loan that 
is not eligible for forgiveness once the corresponding guaranty purchase application is approved. 
If the application is not approved, Benworth may not receive any payment on the loan. Therefore, 
upon information and belief, the fate of these applications before the SBA directly and materially 
impacts Benworth FL’s ability to repay its creditors, including the Reserve Bank.  
39) 
On March 20, 2024, Womply filed a motion in the Arbitration captioned Womply’s 
Motion for Benworth to Deposit Funds into an Escrow Account, requesting that the arbitrator order 
Benworth FL to deposit approximately $86 million—the amount of the Interim Award—into an 
escrow account pending confirmation of a final award. In its motion, Womply argued that 
Benworth FL is pursuing a strategy to delay payment of any final award, which will give it time 
to transfer or hide assets out of Womply’s reach. Womply asserted that the escrow order was 
necessary to ensure that Benworth FL does not render any final award in the Arbitration 
meaningless. On or about April 11, 2024, the arbitrator denied Womply’s motion. 
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40) 
On June 11, 2024, the arbitrator issued a final award requiring Benworth FL to pay 
Womply nearly $118 million in unpaid fees, interest, and costs.7 Pursuant to the Final Award, 
Womply is required to promptly transmit the requested loan files to Benworth FL or reinstate 
Benworth FL’s access to those files via Womply’s technology platform, to the extent it has not yet 
done so. 
iii. 
The Current Litigation Between Benworth and Womply 
41) 
Based on information gained through discovery in the Arbitration, Womply filed 
the instant case to, among other things, “unwind” a transfer of approximately $171 million (the 
“Fraudulent Transfer”) from Benworth FL to Benworth PR, which the Navarros own and control. 
See Womply Compl. ⁋ 2. Womply further seeks the attachment of the Defendants’ assets including 
funds that were fraudulently transferred to Benworth PR and/or the Navarros. Id.  
42) 
On March 27, 2023, Benworth PR filed its Motion to Dismiss or Stay Proceedings 
Pending the Outcome of Arbitration (“Motion to Stay”) because the parties agreed to submit 
certain controversies to the Arbitration. See ECF No. 34.  
43) 
On March 29, 2023, Benworth FL filed its Motion for Joinder to the “Motion to 
Dismiss or Stay Proceedings Pending Outcome of Arbitration” and on August 31, 2023, the 
Navarros filed their Motion for Joinder to the “Motion to Dismiss or Stay Proceedings Pending 
Outcome of Arbitration” [D.E. 34] and the “Joint Reply Brief in Support of Motion to Dismiss 
[D.E. 61] requesting the Court to allow them to join Benworth PR’s Motion to Stay. See ECF 
Nos. 35 and 90. 
 
7 Benworth FL subsequently moved to correct the final award to clarify that the arbitrator was not deciding whether 
Womply would be entitled to post-award interest. Womply agreed to the clarification and the arbitrator entered a 
corrected final award on June 26, 2024 reflecting that change (the “Final Award”). On July 1, 2024, Womply filed a 
petition in the United States District Court for the Northern District of California to confirm the Final Award and enter 
judgment in conformity. See Petition to Confirm Arbitration Award and For Entry of Judgment, Oto Analytics, LLC 
v. Benworth Capital Partners LLC, No. 3:24-cv-03975 (N.D. Cal. July 1, 2024). 
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44) 
On October 12, 2023, this Court stayed the case pending the outcome of the 
Arbitration. See ECF No. 96. 
45) 
On December 26, 2023, Womply filed Plaintiff Oto Analytics, LLC’s Motion to Lift 
Stay (“Motion to Lift Stay”) requesting that this Court lift the stay because the arbitrator had issued 
the Interim Award. See ECF Nos. 99 and 100. 
46) 
On January 8, 2024, the Defendants filed their Opposition to Plaintiffs’ Motion to 
Lift Stay (D.E. 100), and on January 11, 2024, this Court entered an order denying Womply’s 
Motion to Lift Stay until the Arbitration proceedings had concluded and a final award was issued. 
See ECF Nos. 104 and 106. 
47) 
On June 12, 2024, Womply filed Plaintiff Oto Analytics, LLC’s Notice of 
Conclusion of Arbitration and Motion to Lift Stay, requesting that this Court lift the stay of this 
action given the conclusion of the Arbitration and the issuance of the Final Award. See ECF 
No. 107. 
48) 
On June 13, 2024, the Defendants filed their Joint Opposition to Plaintiff’s Notice 
of Conclusion of Arbitration and Motion to Lift Stay. See ECF No. 111. 
49) 
On June 20, 2024, Womply filed Plaintiff Oto Analytics, LLC’s Motion to Inform 
the Court of Recent Events. See ECF No. 117. Among other things, Womply’s motion notified this 
Court that the Final Award “rendered Benworth FL’s debt to Womply a ‘fixed liability’ that is ‘a 
contractual equivalent of a judgment,’” and that the case should proceed to discovery. 
50) 
On June 24, 2024, the Court granted Womply’s request to lift the stay and ordered 
the parties to jointly file a proposed scheduling/case management order. See ECF No. 119. 
Benworth moved for reconsideration of the decision, see ECF No. 120, which this Court 
subsequently denied, see ECF No. 121. 
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51) 
As discussed above, the Reserve Bank’s collateral includes, without limitation, all 
“proceeds and products” (including both principal and interest) Benworth FL has collected in 
respect of the Pledged PPP Loans, a portion of which has, upon information and belief, been 
transferred to Benworth PR pursuant to the LSAs between Benworth FL and Benworth PR or 
otherwise, see Womply Compl. ¶¶ 167-81; Reserve Bank Compl. ¶¶ 54-57, and also to the 
Navarros as shareholders of Benworth FL, Benworth PR or otherwise, see Womply Compl. ¶¶ 
201–04; Reserve Bank Compl. ¶¶ 58-59. Therefore, the Reserve Bank’s first-priority lien extends 
to and includes the Fraudulent Transfer that Womply seeks to unwind and attach through the 
Womply Complaint. 
52) 
To the extent that any property or assets transferred from Benworth FL to 
Benworth PR and the Navarros comprise PPP Collateral, such property or assets must be made 
available to satisfy any obligations under the Program Agreements, including any unpaid 
Advances, on a first-priority basis, ahead of the rights of Womply or any other party.  
C. The Reserve Bank’s Complaint Against Benworth and the Navarros 
53) 
In addition to seeking intervention, on July 10, 2024, the Reserve Bank filed its 
own Complaint against Benworth PR, Benworth FL, and the Navarros.8 In the Reserve Bank 
Complaint, the Reserve Bank alleges that under the Program Agreements, Benworth FL owes it 
approximately $66,980,967.08 in principal, plus interest and other fees and costs, and that the 
Navarros caused Benworth FL to fraudulently transfer assets to Benworth PR and themselves to 
prevent the Reserve Bank from collecting Benworth FL’s debt.  
54) 
Accordingly, the Reserve Bank Complaint requests: (1) rescission of various 
fraudulent transfers; (2) a declaration that Benworth PR is the alter ego of and/or the successor to 
 
8 Federal Reserve Bank of San Francisco v. Benworth Capital Partners LLC et al., Case No. 24-01313.  
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Benworth FL, and Benworth PR is liable to the Reserve Bank; (3) a declaration that the Navarros 
are personally liable for satisfying Benworth FL’s and Benworth PR’s obligations to the Reserve 
Bank as a result of the piercing of the corporate veil; and (4) an award of costs in the Reserve 
Bank’s favor consisting of unpaid principal and accrued interest including, as applicable, default 
interest, as well as additional costs owing under the Program Agreements.9 
FIRST CAUSE OF ACTION: DECLARATORY RELIEF 
 
55) 
The Reserve Bank repeats and incorporates by reference all the preceding 
paragraphs as if fully set forth herein. 
56) 
This is a claim for declaratory relief brought under the provisions of 28 U.S.C. §§ 
2201 and 2202. 
57) 
The Declaratory Judgment Act authorizes all United States courts to issue 
declaratory relief in cases within their jurisdiction. This act specifically provides that:  
(a) In a case of actual controversy within its jurisdiction, except with respect to 
Federal taxes other than actions brought under Section 7428 of the Internal Revenue 
Code of 1986, a proceeding under Section 505 or 1146 of title 11, or in any civil 
action involving an antidumping or countervailing duty proceeding regarding a 
class or kind of merchandise of a free trade area country (as defined in Section 
516A(f)(10) of the Tariff Act of 1930), as determined by the administering 
authority, any Court of the United States, upon the filing of an appropriate pleading, 
may declare the rights and other legal relations of any interested party seeking such 
declaration, whether or not further relief is or could be sought. Any such declaration 
shall have the force and effect of a final judgment or decree and shall be reviewable 
as such. 
 
 
9 The applicable non-default interest rate under the Program Agreements is thirty-five (35) basis points. In the ordinary 
course, Benworth FL receives the payments associated with the Pledged PPP Loans, including the principal plus the 
one hundred (100) basis points of interest, and remits the principal plus thirty-five (35) basis points to the Reserve 
Bank in accordance with and subject to the terms of the PPPLF. Under the Program Agreements, all interest, including 
the sixty-five (65) basis points retained by the PPPLF borrower, is property and collateral of the Reserve Bank until 
all Advances are repaid in full. Additionally, interest on any Advance that is not repaid when due (whether by 
acceleration or otherwise) is calculated at a rate five hundred (500) basis points higher than the otherwise applicable 
interest rate. Reserve Bank Compl. ¶ 24. 
Case 3:23-cv-01034-GMM     Document 127-7     Filed 07/10/24     Page 15 of 19

 
 
16 
 
28 U.S.C. § 2201(a).  
58) 
An actual controversy exists among the Reserve Bank, Womply and the Defendants 
as to their legal rights.  
59) 
Womply seeks an attachment of the Defendants’ assets, including those transferred 
through the Fraudulent Transfer. The Reserve Bank’s first-priority security interest extends to 
assets held by Benworth FL, assets transferred through the Fraudulent Transfer or any other 
transfers later discovered, and to assets otherwise traceable to Benworth FL or available to its 
creditors, to the extent any such assets constitute PPP Collateral.  
60) 
Womply’s requested relief threatens to adversely affect the Reserve Bank’s security 
interest in the PPP Collateral and Benworth’s ability to service the Pledged PPP Loans (further 
diminishing the value of the PPP Collateral).  
61) 
The Reserve Bank is entitled to a declaration by the Court that it has a first-priority 
security interest in the assets Womply seeks to unwind and attach through the Womply Complaint, 
to the extent such assets constitute PPP Collateral.  
62) 
To the extent that Womply has any right to collect from the Defendants, Womply 
should only be allowed to collect from the Defendants’ assets consistent with and subject to the 
Reserve Bank’s pre-existing security interest.  
 
PRAYER FOR RELIEF 
 
WHEREFORE, based on the allegations contained in paragraphs 1 through 63 above, 
Intervenor respectfully requests the following: 
Case 3:23-cv-01034-GMM     Document 127-7     Filed 07/10/24     Page 16 of 19

 
 
17 
 
(i) 
A declaration that the Reserve Bank has a properly perfected first-priority lien and 
security interest in the Defendants’ assets to the extent such assets constitute, in whole 
or in part, PPP Collateral; 
(ii) 
A declaration that Womply may only collect from the Defendants’ assets to the extent 
such assets are not PPP Collateral; 
(iii) 
A declaration that as to any non-PPP Collateral assets, the Reserve Bank may recover 
at least pro rata with Womply; and 
(iv) 
Such other relief as this Court may deem just and proper. 
 
 
Case 3:23-cv-01034-GMM     Document 127-7     Filed 07/10/24     Page 17 of 19

 
 
18 
 
Dated: July 10, 2024    
         Respectfully submitted, 
 
Lisa M. Schweitzer (pro hac vice pending) 
lschweitzer@cgsh.com 
 
Thomas S. Kessler (pro hac vice pending) 
tkessler@cgsh.com 
 
CLEARY GOTTLIEB STEEN & 
HAMILTON LLP 
One Liberty Plaza 
New York, New York 10006 
Telephone: (212) 225-2000 
Facsimile: (212) 225-3999 
Attorneys for the Federal Reserve Bank of 
San Francisco  
 
 
s/ Antonio L. Roig Lorenzo 
Antonio L. Roig Lorenzo  
antonio.roig@oneillborges.com 
USDC-PR No. 207712 
 
s/ Salvador J. Antonetti Stutts 
Salvador J. Antonetti Stutts  
salvador.antonetti@oneillborges.com 
USDC-PR No. 215002 
 
s/ Ubaldo M. Fernández Barrera 
Ubaldo M. Fernandez Barrera 
ubaldo.fernandez@oneillborges.com 
USDC-PR No. 224807 
 
s/ Aníbal A. Román Medina 
Anibal A. Roman Medina  
anibal.roman@oneillborges.com 
USDC-PR No. 308410 
 
O’NEILL & BORGES LLC 
250 Muñoz Rivera Ave., Ste. 800 
San Juan, PR 00918-1813 
Tel: (787) 764-8181 
Fax: (787) 753-8944 
Attorneys for the Federal Reserve Bank of 
San Francisco 
 
  
Case 3:23-cv-01034-GMM     Document 127-7     Filed 07/10/24     Page 18 of 19

 
 
CERTIFICATE OF SERVICE 
 
 
I certify that on July 10, 2024, I filed a copy of the foregoing document using the Court’s 
CM/ECF system, which will automatically generate a Notice of Electronic Filing to all counsel of 
record in this matter. 
 
 
 
 
 
 
 
 
s/ Aníbal A. Román Medina  
 
 
 
 
 
 
 
Aníbal A. Román Medina 
 
 
 
 
 
 
 
  
Case 3:23-cv-01034-GMM     Document 127-7     Filed 07/10/24     Page 19 of 19

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