U.S. District Judge Laura Taylor Swain granted Thursday the Mediation Team’s request to postpone the filing of the Puerto Rico Electric Power Authority’s Plan of Adjustment (PREPA-POA) for one week.
“The Court is persuaded that the Mediation Team’s extension request is reasonable and that the extension is needed to allow the exchange and review of information necessary to advance negotiations,” Swain’s order reads.
Swain postponed the delivery of the PREPA-POA to December 8.
This Thursday was the deadline that the judge addressing Puerto Rico’s bankruptcy process gave the Oversight Board to restructure some $12 billion in PREPA obligations.
The deadline to present PREPA-POA seemed impossible to change, since last month when the Board abandoned the negotiations, Swain warned the entity that she would not grant any more extensions.
Then, Swain was reluctant to grant more time to the Board because the fiscal entity and PREPA’s main bondholder groups had nearly six months to reach an agreement and they failed to do so. The judge even suggested that faced with this lack of progress, she would have to consider dismissing PREPA’s Title II process.
This Thursday, the Mediation team that Swain created in April to complete PREPA´s financial restructuring, said that the new extension would be worth it.
In its brief, the Mediation Team agreed that it was requesting the extension with reservations, but argued that “the alternative of filing a plan on December 1, 2022 in the present context would be significantly less conducive to a negotiated resolution of this case”.
“The Mediation Team will continue its efforts to achieve a global consensus and to do so before the end of the calendar year,” said mediators Shelley C. Chapman, and Judges Brendan L. Shannon and Robert D. Drain, who comprise the mediator group.
According to the mediators’ report, the organized group of PREPA bondholders (Ad Hoc-PREPA), municipal insurers National Public Finance Guarantee, Syncora Guarantee and Assured Guaranty and the JSF have agreed to the extension, which is subject to certain conditions.
“Despite reasonable requests by the Ad Hoc Group and the Monolines, the Oversight Board is still in the process of providing basic data and analyses relevant to the ongoing plan negotiations,” reads the order also signed by Chapman, now a partner at Willkie Farr & Gallagher LLP, and bankruptcy judges Shannon and Drain.
After the Mediation Team requested the extension to Swain, the Board told El Nuevo Día that “it has cooperated and will continue to cooperate” to reach a favorable agreement for all parties.
“The Board has cooperated and will continue to cooperate with the Mediation Team and the parties involved in the mediation process, including providing additional data within the timeframe established in the mediator’s report, and will continue to perform its statutory mission to the people of Puerto Rico, as well as its interested parties,” reads the statement sent to El Nuevo Día.
Swain granted an additional week in exchange for the Board to provide Ad-Hoc-PREPA and the municipal insurers with “all the information” that supports the position of the fiscal entity and at the same time serves as a basis for the POA. Said document must be delivered tomorrow, Friday, December 2.
Board professionals should also be available to answer questions from both groups of creditors and the entity should be ready to negotiate the terms of the plan next week.
This extension will not affect the general hearing on Title III cases scheduled for December 14.