PREPA bondholders complain about changing ‘goalposts’

Puerto Rico Electric Power Authority bondholders complained the Oversight Board is again trying to reduce the amount of money available to pay creditors.

The Ad Hoc Group of PREPA Bondholders filed its complaint as an urgent motion in the PREPA bankruptcy Sunday after the board filed a motion Saturday explaining to U.S. District Judge Laura Taylor Swain why it missed Friday’s deadline to certify a PREPA fiscal plan.

The board said it would be certifying a fiscal plan and submitting “necessary amendments” to its proposed plan of adjustment by June 23.
 

The bondholders said Sunday it “is not remotely possible” all necessary work will be completed by the July 17 start of the plan of adjustment hearing. Swain asked the board to meet with other bankruptcy parties to discuss whether plan of adjustment confirmation dates should be extended.

Swain agreed Monday to the Ad Hoc Group’s request to suspend a June 21 deadline for filing finalized witness lists, exhibit lists, and deposition designations and a June 26 deadline for filing witness declarations.

The finalization of its fiscal plan for PREPA has been “set back by the Oversight Board’s receipt and review of new information from, among others, PREPA, LUMA Energy LLC, Genera PR,” the board said. LUMA is handling the transmission and distribution of energy for PREPA. Genera is scheduled to take over its energy generation in July.

That date for certification of the fiscal plan was moved from June 2 to 16 and then 23 by the board, bondholders complained.

The group said Sunday the board’s explanation that it has received new information “rings hollow.”

LUMA provided electric load forecast information to the board in April based on the board’s macroeconomic forecasts, bondholders claim. Thus the “board’s own advisors helped to create the new data and information that the board will now rely upon to support moving the goalposts on creditors yet again.”

Swain on Sunday postponed until June 28 a joint status report on the expected impact of the forthcoming 2023 PREPA fiscal plan.

The board told The Bond Buyer that it would respond to the Ad Hoc Group’s filing in court.

In another PREPA-related development, Puerto Rico’s main union, generally known by its acronym UTIER, filed an adversary proceeding in the bankruptcy Friday seeking to block Genera’s assumption of the generation capacity.

“It is very unlikely that Judge Swain would find in favor of UTIER,” said Puerto Rico Attorney John Mudd. “There will be a hearing on June 28 on the preliminary injunction request and since an element [to be considered] is probability of success, we will have glimpse of what she thinks.”