Puerto Rico Electric Power Authority

The bond parties argue that they are due the multi-billion-dollar fee from PREPA in addition to bond pricipal and interest.

Judge Laura Taylor Swain also approved the mediators hiring PJT Partners to be their financial advisor.

The Oversight Board's effort to confirm a "a legally infirm cramdown plan is patently flawed and will add years of litigation," the bondholders said.

The bankruptcy judge planned a hearing on the topic for March 19.

They say the reasons the court had given to continue the stay are no longer valid.

They say if the board continues its current approach there will be years more of litigation with outcomes showing the board's positions are "baseless."

The executive director of the Puerto Rico Oversight Board suggested non-settling bondholders might be offered recoveries of about 4% of the principal due.

U.S. District Court Judge Laura Taylor Swain extended the bankruptcy's litigation stay to March 24 as mediators expressed hope about progress on a deal.

Bondholders say the Puerto Rico Energy Bureau is legally required to set rates to cover all bond principal and pre- and post-petition interest due. The board disagrees.

Some observers say Jenniffer González Colón, who took office in January, may be more open to compromise with Puerto Rico Electric Power Authority bondholders.