By The Star Staff
The judge overseeing the Puerto Rico Electric Power Authority’s (PREPA) Title III bankruptcy case on Thursday denied a petition from the nonprofit Puerto Rico Institute of Economic Competitiveness and Sustainability (ICSE by its initials in Spanish) to participate as a consumer representative in mediation to end the utility’s case.
U.S. District Judge Laura Taylor Swain said nothing in her ruling prevents a party in interest from seeking to participate in the mediation.
“The motion is denied,” the judge said. “Nothing contained herein limits a party in interest’s ability to request that the Mediation Team permit it to participate in the mediation as an Additional Party pursuant to the Order Establishing the Terms and Conditions of Mediation.”
The ICSE filed a petition Wednesday to obtain court permission to participate in the negotiations headed by the mediation team.
The nonprofit group said that if the government represented consumers, there would not be a need for consumer representation. As of Thursday, the citizen ombudsman had not certified candidates to occupy the position of consumer representative on PREPA’s governing board, a position left vacant since March 20 of this year.
ICSE said it has been the only active party in PREPA’s debt restructuring process that has consistently advocated for the public interest.
“This has included submitting detailed expert analyses and compelling requests to address the severe socioeconomic impacts on Puerto Rican consumers who can no longer endure additional financial burdens,” the organization said in its court petition. “Supported by various sectors in Puerto Rico through numerous joinder motions, ICSE has facilitated significant citizen participation before this court.”
“It is clearly an objective fact that the interests of the People of Puerto Rico (i.e., residential, commercial, and industrial customers) are not represented, either in reality or in the mediation proceedings before this Court,” the group added. “An effective step toward this goal is providing a seat at the table for those that promote their interests without biases inconsistent with Puerto Rico’s public policies.”
PREPA filed for bankruptcy in 2017 to restructure over $9 billion in debt but has yet to reach a consensual agreement with creditors.
Last month, Swain ordered all parties to go to mediation and imposed a 60-day moratorium on all litigation and plan proposals to help push for a debt adjustment plan for the utility’s debt.
The latest effort to get a plan approved was thwarted by a June decision by the U.S. Court of Appeals for the First Circuit that bondholders have an $8.5 billion secured claim rather than a $2.4 billion claim, as Swain had ruled. Swain is now tasked with determining how much bondholders would be able to collect, so she is pushing for the parties to reach a consensus.
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