Puerto Rico Electric Power Authority

The bondholders say the failure to pay them net revenues since the 2017 bankruptcy start gives rise to their administrative expense claim.

Bond parties say the board's failure to settle the PREPA bankruptcy has contributed to the system's unreliability.

At issue is whether PREPA bondholders may get a portion of the roughly $575 million available for unsecured claims against Puerto Rico's government

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They say the reasons the court had given to continue the stay are no longer valid.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

The decision, when issued, could have implications for other Puerto Rico bond restructurings.

The court has left in place its decision affirming the bondholders lien on net revenues.

The outage began at 5:30 a.m., leaving about 1.3 million of Puerto Rico's 1.4 million customers in the dark, according to Luma Energy, the private company that operates the system. Crews have begun restoring electricity in some areas, but it may take 24 to 48 hours to fully resume service, officials said.

The continued delay in resolving the case raises constitutional concerns, a bondholder attorney said.

Calling it a "tragedy" for residents, without a negotiated setllement resolution could be years away, mediators said.

PREPA says it is short on money and Genera's parent company has said it may go out of business.

After losing its first appeal, the Puerto Rico Oversight Board initiated a second appeal with the First Circuit Court of Appeals.