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Puerto Rico fiscal board seeks extension to place energy utility in receivership

By on May 22, 2019

(CB file)

Creditors object motion seeking trustee

SAN JUAN — A hearing on a request by certain Puerto Rico Electric Power Authority (Prepa) bondholders to have the utility placed into receivership and the public power company’s restructuring will be postponed beyond July if the court approves a petition filed Tuesday by the island’s Financial Oversight and Management Board.

The Puerto Rico government announced on May 3 that it had reached an agreement to restructure the energy utility’s $8.3 billion debt with the Ad Hoc Group of Prepa bondholders and Assured Guaranty. Afterward, the fiscal oversight board filed a motion that sought to dismiss the receiver request and also a U.S. Bankruptcy Rule 9019 motion, which asks the court to allow a trustee to settle controversies within different classes of debtors without further hearings.

The receiver motion was slated to be heard June 12 but the board is seeking an extension, contending that some of Prepa’s creditors will be objecting the Section 9019 motion and want to request discovery.

For that reason, the board and Puerto Rico’s Fiscal Agency and Financial Advisory Authority (Aafaf by its Spanish acronym) agreed with the objectors to establish a schedule for evaluating the Section 9019 motion to which parties to the utility’s restructuring support agreement have consented.

Because the relief requested in the receiver motion to dismiss is conditioned in part on the court’s ruling on the Section 9019 motion, the board asked the court to establish new deadlines for the evaluation of the motions. The schedule proposed by the fiscal panel proposes a hearing for July 24.

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