The Puerto Rico Court of Appeals recently ruled in a significant loan dispute involving Endeavor Capital PR LLC and Wilson 1350 LLC, along with R3 Holdings LLC. The court upheld a lower court's decision that ordered Wilson 1350 to pay Endeavor Capital over $3 million. This ruling, issued on August 26, 2026, is crucial as it clarifies the obligations of companies under loan agreements and the enforcement of such agreements in Puerto Rico.
This case, identified by docket number TA2026AP00675, stems from a loan agreement made on June 24, 2022, where Endeavor Capital provided a substantial loan of $1.35 million to Wilson 1350 for the purchase of property. The loan was secured by various agreements, including a mortgage and collateral agreements. However, Wilson 1350 and R3 Holdings later failed to meet their payment obligations, leading Endeavor Capital to seek legal remedies.
Endeavor Capital filed a lawsuit against Wilson 1350 and R3 Holdings on August 15, 2024, claiming they owed a total of $2,874,897. The case escalated through the courts, with Endeavor Capital asserting that the defendants had defaulted on their payments. The defendants countered that Endeavor Capital lacked the necessary licenses to operate as a financial institution in Puerto Rico, which they argued invalidated the loan agreement.
In the lower court, Endeavor Capital successfully moved for a summary judgment, arguing that there were no material facts in dispute regarding the loan agreement. The court found that Wilson 1350 had indeed defaulted on the loan and ordered them to pay the owed amount, which totaled $3,312,401.21, including principal, interest, and fees.
On appeal, the Puerto Rico Court of Appeals confirmed the lower court's ruling. The court stated, "The evidence presented supports that the loan was valid and enforceable, and the defendants failed to demonstrate any substantial dispute regarding their obligations." The ruling was delivered by a panel of judges, including President Judge Rivera Marchand, Judge Mateu Meléndez, and Judge Boria Vizcarrondo.
This ruling has significant implications for the business community in Puerto Rico. It reinforces the enforceability of loan agreements and clarifies that financial institutions must adhere to regulatory requirements, but also that valid contracts must be honored regardless of the licensing status of the lender. The court emphasized that the lack of a license does not automatically invalidate a loan agreement if the lender has received a determination of exemption from the relevant regulatory authority.
Moving forward, this decision sets a precedent for similar cases involving loan agreements and the obligations of borrowers and lenders. It highlights the importance of maintaining proper documentation and compliance with applicable laws in financial transactions. Companies engaged in lending should ensure they have the necessary licenses and adhere to all regulatory requirements to avoid disputes.
As for the future of this case, it remains to be seen whether Wilson 1350 LLC will seek further legal recourse or attempt to negotiate a settlement following the ruling. The court's decision is final unless appealed to a higher court. Additionally, Wilson 1350's recent filing for bankruptcy may complicate the enforcement of the judgment against them, particularly regarding their obligations to R3 Holdings LLC, which remains liable under the guarantee agreement.