Bankruptcy judge extends PREPA mediation, nixes litigation

Puerto Rico bankruptcy Judge Laura Taylor Swain approved a request to extend mediation discussions in the Puerto Rico Electric Power Authority bankruptcy to Aug. 1. 

Swain approved the mediators’ request on Wednesday, but denied a request for litigation to begin in July and run concurrent with mediation.

The Puerto Rico Oversight Board, the PREPA Bondholders group, the PREPA fuel-line lenders had all expressed support for the extension.

The Unsecured Creditors Committee, the Sistema de Retiro de Empleados de la Autoridad de Energía Eléctrica (SREAEE), and Unión de Trabajadores de la Industria Eléctrica y Riego (UTIER), supported extending the mediation deadline but also said litigation should commence on certain topics. 

In her order, Swain said the commencement of litigation in July “would impair the opportunity for progress in negotiations.”

Swain’s approval is her third extension of the deadline for the board to achieve either a proposed plan of adjustment, termsheet for such a plan, litigation schedule, or a declaration and memorandum of law showing why the court should not dismiss the bankruptcy case. In early March she said she wanted these by May 2.