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Writer's pictureThe San Juan Daily Star

Fiscal board files preliminary list of witnesses to speak in favor of PREPA DAP


David A. Skeel Jr., chairman of the Financial Oversight and Management Board for Puerto Rico

By The Star Staff


The Financial Oversight and Management Board has presented to the Title III bankruptcy court its list of witnesses who will speak in favor of the debt adjustment plan (DAP) to restructure almost $10 billion in Puerto Rico Electric Power Authority (PREPA) debt, and none are local officials.


On March 3, the court entered an order requiring PREPA “to file a preliminary fact witness list and topics about which each witness will testify.” The final confirmation of the plan is slated for July.


The oversight board said it reserves the right to amend the preliminary list.


The list is as follows:


1. David A. Skeel Jr., chairman of the oversight board: May provide fact testimony showing that the DAP complies with the Puerto Rico Oversight, Management and Economic Stability Act (PROMESA) including, without limitation, that it complies with the provisions of Bankruptcy Code sections. Skeel may also provide testimony about facts showing the Fuel Line Lender PSA, the National PSA, the Vitol Settlement Agreement, and Uninsured Bondholder Settlement Agreement are reasonable; the releases, injunctions, and exculpation provisions provided in the DAP are reasonable and appropriate, integral to the DAP, and constitute an essential component of the compromises identified above and in the DAP; and that certain of the commonwealth statutes that the oversight board contends are preempted, or portions thereof, are inconsistent with PROMESA.


2. Robert F. Mujica Jr., executive director of the oversight board: May provide testimony showing that the DAP complies with the provisions of PROMESA and federal bankruptcy laws.


3. David Brownstein, managing director, Citigroup Global Markets Inc.: May provide testimony showing the DAP complies with the provisions of PROMESA and the Bankruptcy Code. Brownstein may also provide testimony about facts showing some or all of the plan settlements are reasonable; that the DAP’s structuring and consummation fees and professional reimbursement fees are fair and reasonable; and that the terms and structure of the new bonds and CVI, and the calculation of creditor recoveries, are fair and reasonable.


4. Christina Pullo, managing director and head of restructuring administration and issuer services at Kroll Restructuring Administration: May provide testimony showing which classes of claims voted to accept the DAP, which impaired classes of claims voted to accept the DAP, and the tabulation of validly tendered bond claims pursuant to the settlement offer.


5. Sheva Levy, principal at Ernst & Young LLP: May provide testimony showing the historical and recent contributions to and funded status of the pension system maintained for employees of PREPA SREAEE, a description of the estimated claim amount and proposed treatment of the claim of the pension system pursuant to the DAP, a description of the estimated proposed recovery of pension claim, the estimated timeline for SREAEE insolvency absent additional funding or reform, and the funding needed for and structure of the PayGo Trust pursuant to the DAP.


6. Juan Santambrogio, managing director at Ernst & Young LLP: May provide testimony regarding the sources and uses of PREPA’s cash at or around the effective date of the DAP.


7. Ojas Shah, a partner at McKinsey & Co.: May provide testimony explaining the best interest test analysis in the disclosure statement and showing the DAP is in the best interest of the creditors.


8. Mark Shankweiler, managing director of Berkeley Research Group: may provide testimony showing the reasonableness of the assumptions made with respect to the estimated total amount of allowed general unsecured claims asserted against the debtor; the estimated total amount of allowed eminent domain/inverse condemnation claims asserted against the debtor; and the estimated total amount of allowed federal claims asserted against the debtor, which is PREPA.


9. William P. Zarakas, principal at Brattle Group Inc.: May provide testimony showing the derivation of the legacy charge proposed in the DAP, and that the DAP is feasible.


10. Ellen S. Smith, senior managing director at FTI: May provide testimony regarding the condition of PREPA, including the transmission & distribution system and generation plants & systems, and the capital improvements necessary to bring the performance of the systems to industry standards.

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