Tuesday, October 16, 2018

Two more lawsuits filed in Puerto Rico bankruptcy case

By on May 31, 2018

SAN JUAN – Two more lawsuits have been filed in the Title III bankruptcy case against the Puerto Rico Highways & Transportation Authority (PRHTA) and the Puerto Rico Electric Power Authority (Prepa).

The first was filed Wednesday by insurers Western Surety Co. and Continental Casualty Co. against the PRHTA, seeking payment of bonds at the request of Betteroads Asphalt LLC and Betterecycling Corp. in relation to public work contracts in which the PRHTA is the project owner.

“In compliance with their obligations thereunder, the Sureties have paid payment bond claims in relation to those projects. To this day, the PRHTA retains funds in relation to those projects, that do not form part of the property of the estate. Accordingly, the Sureties seek a judgment declaring that the funds retained by the PRHTA to prime contractor in the public work projects, Betteroads Asphalt, LLC and/or Betterecycling Corporation, are not property of the estate of the PRHTA in the pending Title III case, but rather property of the Sureties as result of its equitable lien and rights of subrogation,” the lawsuit reads.

The legal action against Prepa was filed in local court in May 2015, but the case was stayed after the utility’s bankruptcy filing under the Promesa law.

Plaintiff PBJL Energy Corp. failed to get relief from the stay and refiled its lawsuit in U.S. District Court on May 29 this year. The California-based company contends the island has failed to increase the percentage of energy it obtains from renewables.

According to PBJL, Prepa reneged on an agreement reached with the company to build a solar energy farm in the municipality of Guánica. The company claims it spent $400,000 buying land in the Montalva ward for the project.

According to the legal filing, Prepa informed PBJL that it could not perform the interconnection evaluation given that it had contracted or assumed commitments for the purchase of renewable energy from other vendors in excess of the set goals for renewable energy.

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