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Puerto Rico bankruptcy judge: Prepa board member’s suit is tied to utility’s case

By on October 15, 2018

SAN JUAN – Judge Laura Taylor Swain has declined to send back to the local courts a lawsuit filed by former Puerto Rico Electric Power Authority board member Luis Santini Gaudier, in which he claims his removal from the board was illegal.

Santini Gaudier was one of two consumer representatives on the public power corporation’s board when all its members were removed after Gov. Ricardo Rosselló enacted a law that changed its composition.

“Plaintiff’s claims related to continued membership on the Prepa Board of Directors and the resulting violation of a property right are integrally related to the conduct of Prepa’s Title proceeding under Promesa [Puerto Rico Oversight, Management, and Economic Stability Act], and issues of federal law are therefore also at stake. To isolate the Commonwealth law issues of governance from the Title III proceedings would be prejudicial to Prepa,” Judge Swain said in her ruling last week.

Santini Gaudier was elected following a law that required Prepa’s board to comprise nine members, including three elected via an election supervised by the Consumer Affairs Department. In the summer of 2014, Prepa held a referendum among its customers to elect customer representative members to the board.

On June 26, 2017, the Legislature enacted the Puerto Rico Electric Power Authority Law that reorganized the utility’s board to comply with the fiscal plan approved for Prepa. The reorganization included a reduction in the number of elected members. On June 28, 2017, Rosselló notified Santini Gaudier of his removal, effective June 26, 2017. Santini Gaudier filed a request for an injunction and his reinstatement.

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