As PREPA requests more time for debt deal talks, its ex-chief seeks $750,000 he’d been guaranteed
By The Star Staff
As the Puerto Rico Electric Power Authority (PREPA) seeks an extension until July of talks toward a debt deal, former PREPA Executive Director Walter Higgins asked the federal Title III bankruptcy court on Thursday for a payment of $750,000 the utility had guaranteed to pay in the event of his termination.
Higgins was appointed in March 2018 as executive director. As part of the appointment, he says PREPA had promised to pay him $900,000 or the equivalent of his complete first year of service if his contract was canceled prior to completing the first year of service, unless the termination was attributable to him.
In or about late May and early June 2018, government officials had publicly stated that PREPA would breach its agreement with Higgins by prohibiting any bonus payment. Higgins’ contract was canceled on or around June 20, 2018.
“At the request of the Governing Board of PREPA, Mr. Higgins continued to serve as PREPA’s Executive Director/Chief Executive Officer until a replacement Executive Director/Chief Executive Officer was appointed on July 23, 2018,” a motion filed Thursday said. “Contrary to the terms agreed upon by the parties, PREPA refused to pay Mr. Higgins the remaining $750,000.00 it had guaranteed to pay in case of termination.”
Higgins is requesting that his post-petition expense be considered an administrative expense claim of PREPA and be granted priority treatment accordingly.
PREPA is currently in mediation toward a debt deal to restructure some $9 billion in debt.
This week, the Financial Oversight and Management Board asked for an extension to the negotiation until July. The judge had last month extended the talks until next week.
The oversight board said the parties and the mediation team have engaged in numerous mediation sessions.
“Mediation remains ongoing as the parties continue to determine whether a consensual plan of adjustment is attainable,” the oversight board states in a court filing. “The Oversight Board anticipates the Mediation Team will extend the Termination Date to July 1, 2022.”
The oversight board has contacted counsel for each mediation party regarding the requested extension, and each of them has consented or confirmed it does not object, with the sole exception of counsel to the Unsecured Creditors Committee (UCC), which was expected to file its objection Thursday. The UCC has said negotiations had gone on for too long.