Puerto Rico power utility’s Title III bankruptcy case heating up
Editor’s note: The following article originally appeared in the May 17-23, 2018, issue of Caribbean Business.
The U.S. First Circuit Court of Appeals in Boston is slated June 5 to hear an appeal from groups of bondholders and monolines that seek to put the Puerto Rico Electric Power Authority (Prepa) under receivership.
That is one event slated to take place during the summer season involving the commonwealth’s Title III bankruptcy case. On May 21, Magistrate Judge Judith Dein will hold a hearing in the U.S. District Court for Boston to consider arguments on an order sought by creditors to force the Financial Oversight & Management Board (FOMB) to comply with a Feb. 26 order to produce fiscal plan development materials for creditors. May 29 is the deadline for creditors to submit proofs of claims.
This month, Puerto Rico’s Ports Authority, Medical Services Administration and Integrated Transit Authority are slated to run out of money, but government officials are mum about whether they will submit these public corporations for Title III bankruptcy.
Regarding the May 21 hearing, the court scheduled the hearing through an order on April 11 after the Ad Hoc Group of General Obligation Bondholders, Ambac Assurance Corp., Assured Guaranty Corp., Assured Guaranty Municipal Corp., Mutual Fund Group and National Public Finance Guarantee Corp. complained the FOMB was not complying with a February order to produce the development documents for the fiscal plan.
The Oversight Board noted the order meant the opposite and lifting restrictions on a data room that is accessible to creditors would be a burden.
Nonetheless, the most important hearing is perhaps the one on June 5. On that day, the First Circuit Court of Appeals will hear arguments on a request filed by the Ad Hoc Group of Prepa Bondholders, Assured Guaranty Corp., Assured Guaranty Municipal Corp., National Public Finance Guarantee Corp. and Syncora Guarantee Inc., which are seeking to put Prepa under a receiver.