Friday, July 19, 2019

Rico Electric Power Authority has until July 1 to file debt avoidance actions

By on June 18, 2019

Entrance to Puerto Rico Electric Power Authority headquarters in San Juan (CB file)

Unsecured Creditors Committee requests to act on behalf of Prepa

SAN JUAN — Actions to invalidate debt similar to the lawsuits filed by the Special Claims Committee of Puerto Rico’s Financial Oversight and Management Board against government vendors and other creditors are not over.

The Puerto Rico Electric Power Authority (Prepa) has until July 1 to file its debt avoidance actions or to forfeit them. The actions come even though Prepa and 40% of its creditors have reached agreements to restructure $8.3 billion in debt.

As it has done before, the Unsecured Creditors Committee (UCC) is asking the U.S. District Court to allow it to pursue avoidance actions, this time on behalf of Prepa.

The UCC asked the court to schedule oral arguments on an expedited basis for June 28 in New York and to set June 21 as the deadline to file objections or responses, with the UCC replying June 25.

“As explained further in the Section 926 Motion, expedited consideration of the Section 926 Motion is critical given the imminent expiration of statutes of limitations for PREPA-related causes of action on July 1, 2019,” the UCC wrote.

The request comes after Puerto Rico’s Financial Oversight and Management Board and the UCC sought an extension to file avoidance actions for commonwealth debtors, contending it needed more time to serve thousands of creditors.

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