For Filing - Claudia Navarro's Answer to FR Complaint 4897-3108-4855 1

Date: 2025-04-16

Source document: For Filing - Claudia Navarro's Answer to FR Complaint 4897-3108-4855 1; document type: Answer and Affirmative Defenses, with jury demand.

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IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF PUERTO RICO

FEDERAL RESERVE BANK OF SAN
FRANCISCO,

Plaintiff

OTO ANALYTICS, LLC; BENWORTH
CAPITAL PARTNERS PR, LLC;
BENWORTH CAPITAL PARTNERS, LLC;
BERNARDO NAVARRO and CLAUDIA
NAVARRO,

Defendants.
Civil No. 23-01034 (GMM) cons.

Civil No. 24-01313 (GMM)

CLAUDIA NAVARRO’S ANSWER AND AFFIRMATIVE DEFENSES
TO THE FEDERAL RESERVE’S COMPLAINT

TO THE HONORABLE COURT:

COMES NOW co-defendant Claudia Navarro (“Mrs. Navarro”), through the undersigned
counsel, and respectfully submits its Answer and Affirmative Defenses to the Federal Reserve
Bank of San Francisco’s (“Federal Reserve”) Complaint filed at Docket No. 1 in the consolidated
case Federal Reserve Bank of San Francisco v. Benworth Capital Partners LLC et al., Civil No.
24-cv-01313:

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Mrs. Navarro’s Answer and Affirmative Defenses to the Federal Reserve’s Consolidated Complaint
Federal Reserve Bank of San Francsico v. Benworth Capital Partners PR LLC, et al.
Civil No. 23-01034 (GMM) cons. 24-01313 (GMM)
Page 2 of 21

NATURE OF ACTION1
1.
Paragraph 1 of the Complaint is the Federal Reserve’s conclusory characterization
of the instant action and its legal conclusions pertaining to the applicable law and, as such, does
not require a response. Mrs. Navarro denies any factual averments in this Paragraph 1.
2.
Paragraph 2 contains the Federal Reserve’s conclusory interpretations of law and
legal conclusions and, as such, does not require a response. Mrs. Navarro denies any factual
averments in this Paragraph 2.
3.
Paragraph 3 is denied.
4.
Paragraph 4 is denied.
THE PARTIES
5.
Paragraph 5 is admitted.
6.
Paragraph 6 contains statements regarding co-defendant Benworth FL that are not
directed to Mrs. Navarro and thus do not require a response from her. Should a response be
required, Mrs. Navarro adopts and incorporates herein Benworth FL’s response to Paragraph 6 in
its Answer to the Complaint.
7.
Paragraph 7 is admitted.
8.
Paragraph 8 is admitted.
9.
Paragraph 9 contains statements regarding co-defendant Mr. Navarro and Benworth
FL that are not directed to Mrs. Navarro and thus do not require a response from her. Should a
response be required, Mrs. Navarro adopts and incorporates herein those defendants’ responses to
Paragraph 10 in their Answers to the Complaint

1 For clarity and precision, Mrs. Navarro will use the same abbreviations and shorthand references
the Federal Reserve uses in its Complaint.
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10.
From Paragraph 10, Mrs. Navarro admits that she is a member of Benworth PR and
holder of 99% of the equity interests thereof. The remainder of Paragraph 10 is denied.
11.
Paragraph 11 is admitted.
JURISDICTION AND VENUE
12.
Paragraph 12 contains the Federal Reserve’s conclusion over the jurisdiction of this
Honorable Court over the present action, a statement that does not require a response. Should a
response be required, any factual averments in this Paragraph 12 are denied.
13.
Paragraph 13 contains the Federal Reserve’s conclusion over the jurisdiction of this
Honorable Court over the present action, a statement that does not require a response. Should a
response be required, any factual averments in this Paragraph 13 are denied.
14.
Paragraph 14 contains the Federal Reserve’s conclusion over the jurisdiction of this
Honorable Court over the present action, a statement that does not require a response. Should a
response be required, any factual averments in this Paragraph 14 are denied.
15.
Paragraph 15 contains the Federal Reserve’s conclusion over the jurisdiction of this
Honorable Court over the present action, a statement that does not require a response. Should a
response be required, any factual averments in this Paragraph 15 are denied.
RELEVANT FACTS2
16.
Paragraph 16 contains legal references or interpretations of law that do not require
a response. Should a response be required, Mrs. Navarro denies Paragraph 16 as drafted. Mrs.
Navarro affirmatively alleges that the CARES Act speaks for itself and denies the Federal
Reserve’s characterization and legal conclusions and/or inferences as to the same.

2 Mrs. Navarro denies the factual averments and legal conclusions Federal Reserve makes in each
of its headings and sub-headings.
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17.
Paragraph 17 contains legal references or interpretations of law that do not require
a response. Should a response be required, Mrs. Navarro denies Paragraph 17 as drafted. Benworth
PR affirmatively alleges that the CARES Act speaks for itself and denies the Federal Reserve’s
characterization and legal conclusions and/or inferences as to the same.
18.
Paragraph 18 is denied for lack of information sufficient to form a belief about the
truth of the allegation.
19.
Paragraph 19 contains statements regarding co-defendant Benworth FL that are not
directed to Mrs. Navarro and thus do not require a response from her. Should a response be
required, Mrs. Navarro adopts and incorporates herein Benworth FL’s response to Paragraph 19
in its Answer to the Complaint.
20.
Paragraph 20 contains statements regarding co-defendant Benworth FL that are not
directed to Mrs. Navarro and thus do not require a response from her. Should a response be
required, Mrs. Navarro adopts and incorporates herein Benworth FL’s response to Paragraph 20
in its Answer to the Complaint.
21.
Paragraph 21 contains statements regarding co-defendant Benworth FL that are not
directed to Mrs. Navarro and thus do not require a response from her. Should a response be
required, Mrs. Navarro adopts and incorporates herein Benworth FL’s response to Paragraph 21
in its Answer to the Complaint.
22.
Paragraph 22 does not contain allegations directed at Mrs. Navarro and thus does
not require a response from her. Should a response be required, Mrs. Navarro adopts and
incorporates herein Benworth FL’s response to Paragraph 22 in its Answer to the Complaint.
23.
Paragraph 23 does not contain allegations directed at Mrs. Navarro and thus does
not require a response from her. Should a response be required, Mrs. Navarro adopts and
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incorporates herein Benworth FL’s response to Paragraph 23 in its Answer to the Complaint.
24.
Paragraph 24 contains statements regarding co-defendant Benworth FL that are not
directed to Mrs. Navarro and thus do not require a response from her. Should a response be
required, Mrs. Navarro adopts and incorporates herein Benworth FL’s response to Paragraph 24
in its Answer to the Complaint.
25.
Paragraph 25 does not contain allegations directed at Mrs. Navarro and thus does
not require a response from her. Should a response be required, Mrs. Navarro adopts and
incorporates herein Benworth FL’s response to Paragraph 25 in its Answer to the Complaint.
26.
Paragraph 26 contains statements regarding co-defendant Benworth FL that are not
directed to Mrs. Navarro and thus do not require a response from her. Should a response be
required, Mrs. Navarro adopts and incorporates herein Benworth FL’s response to Paragraph 26
in its Answer to the Complaint.
27.
Paragraph 27 contains statements regarding co-defendant Benworth FL that are not
directed to Mrs. Navarro and thus do not require a response from her. Should a response be
required, Mrs. Navarro adopts and incorporates herein Benworth FL’s response to Paragraph 27
in its Answer to the Complaint.
28.
Paragraph 28, including footnote 3, does not contain allegations directed at Mrs.
Navarro and thus does not require a response from her. Should a response be required, Mrs.
Navarro adopts and incorporates herein Benworth FL’s response to Paragraph 28 in its Answer to
the Complaint.
29.
Paragraph 29 does not contain allegations directed at Mrs. Navarro and thus does
not require a response from her. Should a response be required, Mrs. Navarro adopts and
incorporates herein Benworth FL’s response to Paragraph 29 in its Answer to the Complaint.
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30.
Paragraph 30 contains statements regarding co-defendant Benworth FL that are not
directed to Mrs. Navarro and thus do not require a response from her. Should a response be
required, Mrs. Navarro adopts and incorporates herein Benworth FL’s response to Paragraph 30
in its Answer to the Complaint.
31.
Paragraph 31 contains statements regarding co-defendant Benworth FL that are not
directed to Mrs. Navarro and thus do not require a response from her. Should a response be
required, Mrs. Navarro adopts and incorporates herein Benworth FL’s response to Paragraph 31
in its Answer to the Complaint.
32.
Paragraph 32 contains statements regarding co-defendant Benworth FL that are not
directed to Mrs. Navarro and thus do not require a response from her. Should a response be
required, Mrs. Navarro adopts and incorporates herein Benworth FL’s response to Paragraph 32
in its Answer to the Complaint.
33.
Paragraph 33 contains statements regarding co-defendant Benworth FL that are not
directed to Mrs. Navarro and thus do not require a response from her. Should a response be
required, Mrs. Navarro adopts and incorporates herein Benworth FL’s response to Paragraph 33
in its Answer to the Complaint.
34.
Paragraph 34 contains statements regarding co-defendant Benworth FL that are not
directed to Mrs. Navarro and thus do not require a response from her. Should a response be
required, Mrs. Navarro adopts and incorporates herein Benworth FL’s response to Paragraph 34
in its Answer to the Complaint.
35.
Paragraph 35 contains statements regarding co-defendant Benworth FL that are not
directed to Mrs. Navarro and thus do not require a response from her. Should a response be
required, Mrs. Navarro adopts and incorporates herein Benworth FL’s response to Paragraph 35
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in its Answer to the Complaint.
36.
Paragraph 36 contains statements regarding co-defendant Benworth FL that are not
directed to Mrs. Navarro and thus do not require a response from her. Should a response be
required, Mrs. Navarro adopts and incorporates herein Benworth FL’s response to Paragraph 36
in its Answer to the Complaint.
37.
Paragraph 37 does not contain allegations directed at Mrs. Navarro and thus does
not require a response from her. Should a response be required, Mrs. Navarro adopts and
incorporates herein Benworth FL’s response to Paragraph 37 in its Answer to the Complaint.
38.
Paragraph 38 contains statements regarding co-defendant Benworth FL that are not
directed to Mrs. Navarro and thus do not require a response from her. Should a response be
required, Mrs. Navarro adopts and incorporates herein Benworth FL’s response to Paragraph 38
in its Answer to the Complaint.
39.
Paragraph 39 contains statements regarding co-defendant Benworth FL that are not
directed to Mrs. Navarro and thus do not require a response from her. Should a response be
required, Mrs. Navarro adopts and incorporates herein Benworth FL’s response to Paragraph 39
in its Answer to the Complaint.
40.
Paragraph 40 contains statements regarding co-defendant Benworth FL that are not
directed to Mrs. Navarro and thus do not require a response from her. Should a response be
required, Mrs. Navarro adopts and incorporates herein Benworth FL’s response to Paragraph 40
in its Answer to the Complaint.
41.
Paragraph 41 contains statements regarding co-defendant Benworth FL that are not
directed to Mrs. Navarro and thus do not require a response from her. Should a response be
required, Mrs. Navarro adopts and incorporates herein Benworth FL’s response to Paragraph 41
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in its Answer to the Complaint.
42.
Paragraph 42 contains statements regarding co-defendant Benworth FL that are not
directed to Mrs. Navarro and thus do not require a response from her. Should a response be
required, Mrs. Navarro adopts and incorporates herein Benworth FL’s response to Paragraph 42
in its Answer to the Complaint.
43.
Paragraph 43 contains statements regarding co-defendant Benworth FL that are not
directed to Mrs. Navarro and thus do not require a response from her. Should a response be
required, Mrs. Navarro adopts and incorporates herein Benworth FL’s response to Paragraph 43
in its Answer to the Complaint.
44.
Paragraph 44 contains statements regarding co-defendant Benworth FL that are not
directed to Mrs. Navarro and thus do not require a response from her. Should a response be
required, Mrs. Navarro adopts and incorporates herein Benworth FL’s response to Paragraph 44
in its Answer to the Complaint.
45.
From Paragraph 45, Mrs. Navarro admits that Womply filed an action in this Court
with case style Oto Analytics, LLC v. Benworth Capital Partners PR LLC, et al., No. 23-01034
(GMM). The remainder of Paragraph 45 contains the Federal Reserve’s characterizations of
averments made by Womply and, as such, does not require a response. Mrs. Navarro otherwise
denies any factual averments in the remainder of Paragraph 45.
46.
Paragraph 46 is denied as drafted. Mrs. Navarro affirmatively alleges that Benworth
PR filed a Certificate of Organization and Certificate of Formation of a Limited Liability Company
with the Government of Puerto Rico Department of State on June 28, 2021.
47.
Paragraph 47 is denied.
48.
Paragraph 48 is denied as drafted. Mrs. Navarro affirmatively alleges that the
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content of the referenced website speaks for itself and denies the Federal Reserve’s
characterization and legal conclusions and/or inferences regarding the same.
49.
Paragraph 49 is denied as drafted. Mrs. Navarro affirmatively alleges that the
content of Mr. Navarro’s LinkedIn profile speaks for itself and denies the Federal Reserve’s
characterization and legal conclusions and/or inferences regarding the same.
50.
Paragraph 50 is denied as drafted. Mrs. Navarro affirmatively alleges that the
content of the press release referenced in Paragraph 50 and footnote 9 speaks for itself and denies
the Federal Reserve’s characterization and legal conclusions and/or inferences regarding the same.
51.
Paragraph 51 is denied.
52.
Paragraph 52 contains statements regarding co-defendant Benworth FL that are not
directed to Mrs. Navarro and thus do not require a response from her. Should a response be
required, Mrs. Navarro adopts and incorporates herein Benworth FL’s response to Paragraph 52
in its Answer to the Complaint.
53.
Paragraph 53 is denied.
54.
From Paragraph 54, Mrs. Navarro admits that (1) Benworth PR entered into the
LSAs with Benworth FL, (2) Mr. Navarro executed the LSAs on behalf of Benworth FL, and (3)
Mrs. Navarro executed the LSAs on behalf of Benworth PR. The remainder of the paragraph,
including the Federal Reserve characterization and legal conclusions and/or inferences as to the
LSAs, is denied.
55.
From Paragraph 55, Mrs. Navarro admits only that Benworth PR entered into the
first LSA on May 31, 2021, and that it filed a Certificate of Organization and Certificate of
Formation of a Limited Liability Company with the Government of Puerto Rico Department of
State on June 28, 2021, but denies the Federal Reserve’s characterization and legal conclusions
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and/or inferences as to the first LSA or Benworth PR’s registration.
56.
Paragraph 56 is denied as drafted. Mrs. Navarro affirmatively alleges that Benworth
PR was lawfully compensated by Benworth FL for the services it engaged Benworth PR to
perform.
57.
The portions of Paragraph 57 that contain statements regarding co-defendant
Benworth FL are not directed to Mrs. Navarro and thus do not require a response from her. Should
a response be required, Mrs. Navarro adopts and incorporates herein Benworth FL’s response to
Paragraph 57 and footnote 10 in its Answer to the Complaint. The remainder of Paragraph 57 and
footnote 10 are denied as drafted. Mrs. Navarro affirmatively alleges that Benworth PR was
compensated Benworth FL for services provided under the LSAs.
58.
Paragraph 58 contains statements regarding co-defendant Benworth FL that are not
directed to Mrs. Navarro and thus do not require a response from her. Should a response be
required, Mrs. Navarro adopts and incorporates herein Benworth FL’s response to Paragraph 58
in its Answer to the Complaint.
59.
Paragraph 59 contains the Federal Reserve’s legal interpretations and conclusions
of case TotalBank Florida Bank Corp. v. Bernardo Enrique Navarro, Case No. 2012-012858 (Fla.
Cir. Ct. Miami-Dade Cnty.), thus does not require a response from Mrs. Navarro. Should a
response be required, Mrs. Navarro denies Paragraph 59.
60.
Paragraph 60 is denied.
61.
Paragraph 61 does not contain allegations directed at Mrs. Navarro and thus does
not require a response from her. Should a response be required, Mrs. Navarro adopts and
incorporates herein Benworth FL’s response to Paragraph 61 in its Answer to the Complaint.
62.
Paragraph 62, including its subsections (a) through (h), is denied.
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63.
Paragraph 63 does not contain allegations directed at Mrs. Navarro and thus does
not require a response from her. Should a response be required, Mrs. Navarro adopts and
incorporates herein Benworth FL’s response to Paragraph 63 in its Answer to the Complaint.
FIRST CAUSE OF ACTION: BREACH OF CONTRACT AND
COLLECTION OF MONEY
64.
Count I is not against Mrs. Navarro but, to the extent necessary, Mrs. Navarro
incorporates and realleges her responses to all the preceding paragraphs as if fully set forth herein.
65.
Count I is not against Mrs. Navarro but, to the extent necessary, Paragraph 65 is
denied.
66.
Count I is not against Mrs. Navarro but, to the extent necessary, Paragraph 66 is
denied.
67.
Count I is not against Mrs. Navarro but, to the extent necessary, Paragraph 67 is
denied and Mrs. Navarro affirmatively states that the Reserve Bank is not entitled to the relief it
seeks.
SECOND CAUSE OF ACTION: ACTUAL FRAUDULENT TRANSFER

68.
Mrs. Navarro incorporates and realleges her responses to all the preceding
paragraphs as if fully set forth herein.
69.
This first sentence of Paragraph 69 is denied as drafted. Mrs. Navarro affirmatively
alleges that Benworth PR filed a Certificate of Organization and Certificate of Formation of a
Limited Liability Company with the Government of Puerto Rico Department of State on June 28,
2021. The remainder of Paragraph 69 is denied.
70.
Paragraph 70 is denied.
71.
Paragraph 71 is denied.
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THIRD CAUSE OF ACTION: CONSTRUCTIVE FRAUDULENT TRANSFER

72.
Mrs. Navarro incorporates and realleges her responses to all the preceding
paragraphs as if fully set forth herein.
73.
The first sentence of Paragraph 73 is denied as drafted. Mrs. Navarro affirmatively
alleges that Benworth PR filed a Certificate of Organization and Certificate of Formation of a
Limited Liability Company with the Government of Puerto Rico Department of State on June 28,
2021. The remainder of Paragraph 73 is denied.
74.
Paragraph 74 is denied.
75.
Paragraph 75 does not contain allegations directed at Mrs. Navarro and thus does
not require a response from her. Should a response be required, Mrs. Navarro adopts and
incorporates herein Benworth FL’s response to Paragraph 75 in its Answer to the Complaint.
76.
Paragraph 76 does not contain allegations directed at Mrs. Navarro and thus does
not require a response from her. Should a response be required, Mrs. Navarro adopts and
incorporates herein Benworth FL’s response to Paragraph 76 in its Answer to the Complaint.
77.
Paragraph 77 does not contain allegations directed at Mrs. Navarro and thus does
not require a response from her. Should a response be required, Mrs. Navarro adopts and
incorporates herein Benworth FL’s response to Paragraph 77 in its Answer to the Complaint.
FOURTH CAUSE OF ACTION: FRAUDULENT TRANSFERS,
RESCISSORY ACTION, AND DAMAGES

78.
Mrs. Navarro incorporates and realleges her responses to all the preceding
paragraphs as if fully set forth herein.
79.
Paragraph 79 contains translations of legal references or interpretations of law that
do not require a response. Should a response be required, Paragraph 79 is denied.
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80.
Paragraph 80 contains translations of legal references or interpretations of law that
do not require a response. Should a response be required, Paragraph 80 is denied.
81.
Paragraph 81 does not contain allegations directed at Mrs. Navarro and thus does
not require a response from her. Should a response be required, Mrs. Navarro adopts and
incorporates herein Benworth FL’s response to Paragraph 81 in its Answer to the Complaint.
82.
Paragraph 82 is denied.
83.
Paragraph 83 is denied.
84.
Paragraph does not contain allegations directed at Mrs. Navarro and thus does not
require a response from her. Should a response be required, Mrs. Navarro adopts and incorporates
herein Benworth FL’s response to Paragraph 84 in its Answer to the Complaint.
85.
Paragraph 85 is denied.
86.
Paragraph 86 is denied.
87.
Paragraph 87 is denied, and Mrs. Navarro affirmatively states that the Reserve Bank
is not entitled to the relief it seeks.
FIFTH CAUSE OF ACTION: DECLARATORY RELIEF
ALTER EGO OR SUCCESSOR LIABILITY

88.
Mrs. Navarro incorporates and realleges her responses to all the preceding
paragraphs as if fully set forth herein.
89.
Paragraph 89 contains legal references or interpretations of law that do not require
a response. Should a response be required, Paragraph 89 is denied.
90.
Paragraph 90 contains legal references or interpretations of law that do not require
a response. Should a response be required, Paragraph 90 is denied.
91.
Paragraph 91 does not contain allegations directed at Mrs. Navarro and thus does
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not require a response from her. Should a response be required, Mrs. Navarro adopts and
incorporates herein Benworth FL’s response to Paragraph 91 in its Answer to the Complaint.
92.
Paragraph 92 is denied.
93.
Paragraph 93 is denied.
94.
Paragraph 94 contains legal references or interpretations of law that do not require
a response. Should a response be required, Paragraph 94 is denied.
95.
Paragraph 95 is denied.
96.
Paragraph 96 contains legal references or interpretations of law that do not require
a response. Should a response be required, Paragraph 96 is denied.
97.
Paragraph 97, including its subsections (a) through (n), is denied.
98.
Paragraph 98 is denied.
99.
Paragraph 99 is not a factual averment and thus does not require a response. Should
a response be required, Paragraph 99 is denied.
SIXTH CAUSE OF ACTION: DECLARATORY RELIEF VEIL PIERCING

100.
Mrs. Navarro incorporates and realleges her responses to all the preceding
paragraphs as if fully set forth herein.
101.
Paragraph 101 contains legal references or interpretations of law that do not require
a response. Should a response be required, Paragraph 101 is denied.
102.
Paragraph 102 contains legal references or interpretations of law that do not require
a response. Should a response be required, Paragraph 102 is denied.
103.
Paragraph 103 does not contain allegations directed at Mrs. Navarro and thus does
not require a response from her. Should a response be required, Mrs. Navarro adopts and
incorporates herein Benworth FL’s response to Paragraph 103 in its Answer to the Complaint.
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104.
Paragraph 104 is denied.
105.
Paragraph 105, including its subsections (a) through (q), is denied, and Mrs.
Navarro affirmatively states that the Reserve Bank is not entitled to the relief it seeks.
The last unnumbered paragraph under the Sixth Cause of Action is denied.
SEVENTH CAUSE OF ACTION: CONVERSION

106.
Mrs. Navarro incorporates and realleges her responses to all the preceding
paragraphs as if fully set forth herein.
107.
Paragraph 107 is denied.
108.
Paragraph 108 is denied.
109.
Paragraph 109 is denied.
110.
Paragraph 110 is denied.
PRAYER AND RELIEF

111.
Paragraph 111 and the WHEREFORE are denied. The Federal Reserve is not
entitled to any of the relief sought in the Complaint.
JURY TRIAL DEMAND

Mrs. Navarro demands trial by jury on all issues and counts.
MRS. NAVARRO’S AFFIRMATIVE DEFENSES
FIRST AFFIRMATIVE DEFENSE
(Reasonable Actions and Good Faith)

The Complaint, and each purported cause of action alleged therein, is barred, in whole or
in part, because Mrs. Navarro’s conduct was at all times reasonable, proper, in good faith, and in
compliance with applicable law. Thus, the Federal Reserve’s claim against Mrs. Navarro related
to piercing the corporate veil fails ab initio.
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SECOND AFFIRMATIVE DEFENSE
(Good Faith and Fair Value)

The Complaint, and each purported cause of action alleged therein, is barred, in whole or
in part, because Mrs. Navarro’s conduct was at all times made in good faith and that reasonably
equivalent value was received in exchange for the transfers referenced in the Complaint. And with
respect to reasonably equivalent value, Benworth PR was asked by the Reserve Bank to submit a
bid on servicing Kabbage’s PPP loan portfolio and it submitted a bid that is consistent with the
fees Benworth PR charged for servicing Benworth FL’s PPP loan portfolio. Although the Reserve
Bank did not accept Benworth PR’s bid, it did enter into an agreement with a company to service
the Kabbage PPP loan portfolio that results in fees being paid to that company that are in line with
the fees Benworth PR charged Benworth FL. Thus, the Federal Reserve’s claim against Mrs.
Navarro related to piercing the corporate veil fails ab initio.
THIRD AFFIRMATIVE DEFENSE
(Lack of Insolvency)

The Complaint, and each purported cause of action alleged therein, is barred, in whole or
in part, because the transfers referenced in the Complaint did not render Benworth FL insolvent.
Thus, the Federal Reserve’s claim against Mrs. Navarro related to piercing the corporate veil fails
ab initio.
FOURTH AFFIRMATIVE DEFENSE
(Ordinary Course of Business)

The Complaint, and each purported cause of action alleged therein, is barred, in whole or
in part, because the transfers referenced in the Complaint were made in the ordinary course of
business. Thus, the Federal Reserve’s claim against Mrs. Navarro related to piercing the corporate
veil fails ab initio.
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FIFTH AFFIRMATIVE DEFENSE
(Lack of Fraudulent Intent)

The Complaint, and each purported cause of action alleged therein, is barred, in whole or
in part, because Benworth FL lacks the intent to defraud creditors. Thus, the Federal Reserve’s
claim against Mrs. Navarro related to piercing the corporate veil fails ab initio.
SIXTH AFFIRMATIVE DEFENSE
(Subsequent Good Faith Transferee)

The Complaint, and each purported cause of action alleged therein, is barred, in whole or
in part, because the subsequent transferee took the funds in good faith and for value, without
knowledge of the alleged fraud. Thus, the Federal Reserve’s claim against Mrs. Navarro related to
piercing the corporate veil fails ab initio.
SEVENTH AFFIRMATIVE DEFENSE
(Payment of Legitimate Debt)

The Complaint, and each purported cause of action alleged therein, is barred, in whole or
in part, because the transfers referenced in the Complaint were not fraudulent but, instead, were
made to pay off a legitimate obligation under Benworth FL’s loan servicing agreements with
Benworth PR. Thus, the Federal Reserve’s claim against Mrs. Navarro related to piercing the
corporate veil fails ab initio.
EIGHTH AFFIRMATIVE DEFENSE
(Separate Financial Records)

The alter ego or successor claim (Count V) and veil piecing claim (Count VI) in the
Complaint is barred, in whole or in part, because Benworth PR’s finances were kept separate from
those of Benworth FL, Mr. Navarro, and Mrs. Navarro, indicating a clear distinction between the
corporate entities. Thus, the Federal Reserve’s claim against Mrs. Navarro related to piercing the
corporate veil fails ab initio.
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NINTH AFFIRMATIVE DEFENSE
(No Commingling of Assets)

The alter ego or successor claim (Count V) and veil piecing claim (Count VI) in the
Complaint is barred, in whole or in part, because there was no commingling of corporate assets
between Benworth PR, Benworth FL, Mr. Navarro, and Mrs. Navarro. Thus, the Federal Reserve’s
claim against Mrs. Navarro related to piercing the corporate veil fails ab initio.
TENTH AFFIRMATIVE DEFENSE
(Legitimate Business Purpose)

The alter ego or successor claim (Count V) and veil piecing claim (Count VI) in the
Complaint is barred, in whole or in part, against Benworth PR because it was formed and operated
for legitimate business purposes and not to perpetrate fraud or evade obligations. Thus, the Federal
Reserve’s claim against Mrs. Navarro related to piercing the corporate veil fails ab initio.
ELEVENTH AFFIRMATIVE DEFENSE
(Estoppel, Ratification and Waiver)
The Complaint, and each purported cause of action alleged therein, is barred, in whole or
in part, by the doctrines of estoppel, ratification, and waiver, as it knew or should have known of
the alleged conduct and failed to take action. Mrs. Navarro incorporates the affirmative allegations
of Benworth FL in this regard contained in its Answer to the Complaint.
TWELFTH AFFIRMATIVE DEFENSE
(Economic Duress, Impossibility, and Impracticability)
The Complaint, and each purported cause of action alleged therein, is barred, in whole or
in part, because performance of the obligations alleged in the Complaint was rendered impossible,
impracticable, or commercially unreasonable due to factors outside of Benworth FL’s control, as
affirmatively alleged by Benworth FL in its Answer to the Complaint, which allegations are
incorporated here in full by reference.
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THIRTEENTH AFFIRMATIVE DEFENSE
(Offset and Partial Satisfaction)
The Complaint, and each purported cause of action alleged therein, is barred, in whole or
in part, because the amounts allegedly owed have been partially satisfied. To the extent Benworth
FL has paid down or otherwise reduced its obligations under the Program Agreements, any
damages awarded must be offset or reduced accordingly. Moreover, any damages awarded must
be offset by the amount of funds that the Reserve Bank has retained under the direct pay structure
with the SBA to which it is not entitled, and which has resulted in Benworth FL and Benworth PR
servicing PPP loans without compensation because the Reserve Bank is withholding their interest
differential.
FOURTEENTH AFFIRMATIVE DEFENSE
(Failure of Condition Precedent)
The Complaint, and each purported cause of action alleged therein, is barred, in whole or
in part, because the Reserve Bank failed to satisfy a condition precedent to the filing of this lawsuit.
Specifically, the Letters of Agreement state that, “[i]n the event that the Borrower fails to pay an
Advance on the Maturity Date thereof, the Reserve Bank first shall seek repayment from
realization upon the PPPLF Collateral” and only “[t]hereafter, the Reserve Bank may pursue any
remedies it may have to recover the remaining outstanding amount of an Advance.” Thus, as a
condition precedent to the Reserve Bank exercising its recourse remedies against Defendants, the
Reserve Bank was required to first seek repayment from realization upon the PPPLF Collateral.
The Reserve Bank failed to do so.
FIFTEENTH AFFIRMATIVE DEFENSE
(Bad Faith and Unclean Hands)
The Complaint, and each purported cause of action alleged therein, is barred, in whole or
Case 3:23-cv-01034-GMM Document 237 Filed 04/16/25 Page 19 of 21

in part, by the doctrines of bad faith and unclean hands. The Federal Reserve is attempting to
enforce provisions of the Paycheck Protection Program (PPP) lending rules and loan documents
in a manner that discriminatorily targets Benworth FL, while declining to take comparable action
against similarly situated entities. Specifically, the Federal Reserve has brought this action against
Benworth FL, its affiliates, and its principals, even though Benworth FL has repaid close to 99%
of the PPP funds it borrowed, while the four largest PPP lenders collectively owe over $1.6 billion
in outstanding loans and have not been subjected to similar litigation or enforcement action.
On information and belief, the Federal Reserve’s attempt to declare Benworth FL’s PPP
loans in default and retroactively impose personal liability is not grounded in any uniform
enforcement policy. Rather, the Federal Reserve has acted in bad faith and with improper motive
by targeting Benworth FL, its affiliates, and its principals based on their high-profile nature and/or
political activities. Despite their substantially higher outstanding balances and lower repayment
rates, no similar enforcement action has been taken against other large PPP lenders. The Federal
Reserve’s attempt to convert a non-recourse loan into a recourse obligation under these
circumstances is inequitable, discriminatory, and motivated by improper considerations that render
the action legally infirm.

CERTIFICATE OF SERVICE: We hereby certify that on this same date the foregoing
reply was filed with the Clerk of the Court using the CM/ECF system, which will send notification
of such filing to all attorneys and participants of record.
RESPECTFULLY SUBMITTED.
In San Juan, Puerto Rico, on April 16, 2025.

Case 3:23-cv-01034-GMM Document 237 Filed 04/16/25 Page 20 of 21

CASELLAS ALCOVER & BURGOS PSC
PO Box 364924
San Juan, PR 00936-4924
Tel. (787) 756-1400
Fax. (787) 756-1401
rcasellas@cabprlaw.com
cloubriel@cabprlaw.com
/s/ Ricardo F. Casellas
USDC-PR Bar No. 203114
/s/ Carla S. Loubriel Carrión
USDC-PR Bar No. 227509

Counsel for Benworth Capital Partners PR, LLC

Case 3:23-cv-01034-GMM Document 237 Filed 04/16/25 Page 21 of 21

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For Filing - Claudia Navarro's Answer to FR Complaint 4897-3108-4855 1

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