PREPA’s unsecured creditors, union, retirees want to bring their case to Swain
The unsecured creditors, union, and retiree group for the Puerto Rico Electric Power Authority, frustrated by a lack of progress, want to argue their case before Bankruptcy Judge
The mediators, the Oversight Board, and other parties oppose the move, made in filings Sunday with the U.S. District Court for Puerto Rico by the Unsecured Creditors Committee, the Sistema de Retiro de Empleados de la Autoridad de Energía Eléctrica (SREAEE), and Unión de Trabajadores de la Industria Eléctrica y Riego (UTIER).
For five years “a single strategy has been pursued: to attempt to formulate a plan of adjustment by negotiating exclusively with the PREPA bondholders, while staying indefinitely the committee’s objection to the PREPA bond claims,” wrote UCC attorney
The UCC, he said, seeks litigation on two issues: “whether the PREPA bondholders’ security interest is limited to funds actually deposited into specified accounts held by the PREPA bond trustees (in the amount of approximately
Since the board filed a motion to approve a PREPA debt deal in
While the Oversight Board says there have been “numerous” mediation sessions in the last few months, the UCC has not been included in these sessions, Despins said.
The issues before the court would focus on legal and contractual interpretation issues, not require fact discovery, he said, and thus move quickly.
“The committee is not suggesting at this time that mediation be put on hold in favor of litigation,” Despins said. The committee wants any further extensions of the
UTIER and SREAEE made similar arguments and said they weren't invited to participate in mediation sessions.
“For this court to continue extending the schedule without resolving the pending litigation would repeat the mistakes of the defunct Restructuring Support Agreement,” the groups said through their lawyers. “Should the mediation process continue, it should include all the mediation parties and be parallel to the litigation that has been adjourned.”
Mediators could not be reached for comment by press time.
The Oversight Board, Puerto Rico Fiscal Agency and Financial Advisory Authority, Ad Hoc PREPA Bondholders Group, National Public Finance Guarantee, Assured Guaranty (AGO), and the fuel line lenders told the court Friday they support a simple extension of the mediation to
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PREPA has been in a bankruptcy process guided by Title III of PROMESA since mid-2017. Talks about restructuring the bonds go back to mid-2015.
In a separate matter related to PREPA, Gov.
Pierluisi had recommended transferring money from the State Insurance Fund Corp. to the authority temporarily to cover expenses that would be lost by the price reduction.