Bonds

Court approves fourth PREPA mediation extension

Puerto Rico bankruptcy Judge Laura Taylor Swain approved the extension of mediation discussions for the Puerto Rico Electric Power Authority for the fourth time this year.

Swain ordered the mediation to continue to at least Aug. 15, with the mediation team being given the authority to extend the mediation deadline until Sept. 9. In late June she had set the deadline for Aug. 1. She released her order Friday.

The mediation team requested the extension and the Puerto Rico Oversight Board endorsed it. 

Judge Laura Taylor Swain said PREPA mediations can go until Sept. 9 without any further approval from her.

A PREPA retiree group and union filed a joint objection to the request for mediation extension. They asked for the litigation to be commenced and i n a separate filing the Unsecured Creditors Committee also asked for litigation to be started. 

Swain cited the mediation team’s claims that substantial progress has been made to explain why she would not order the start of litigation at this time. 

The new deadlines are not only for the end of mediation but also the Oversight Board to submit either a proposed plan of adjustment, a term sheet for a plan of adjustment, a litigation schedule, or “a declaration or memorandum of law showing cause as to why the court should not consider dismissal of PREPA’s Title III [bankruptcy] case.” She called this the “Path Forward Deadline.”

Swain said the mediation and Path Forward Deadlines could be extended by the mediation team for its involvement in secondary or drafting items.

“The court is mindful that settlement discussions have not progressed with a speed commensurate with the original desired timetable of all parties and the court,” Swain said. 

The current round of mediation sessions started in response to Gov. Pedro Pierluisi withdrawing from a PREPA debt restructuring deal in early March. At that time Swain asked the board to submit a proposed plan of adjustment by May 2. 

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