By The Star Staff
The Financial Oversight and Management Board has requested an extension until September of the lead mediator tenure as part of talks to settle the Puerto Rico Electric Power Authority’s (PREPA) bankruptcy.
The petition, filed late last week, came more than a week after the case in favor and against the confirmation of PREPA’s debt adjustment plan was submitted. The case is awaiting a ruling from U.S. District Judge Laura Taylor Swain, who is overseeing Puerto Rico’s Title III bankruptcy cases.
“Consistent with statements made by the court at the hearing to consider confirmation of the modified Fourth Amended Title III Plan of Adjustment of the Puerto Rico Electric Power Authority regarding the availability of Mediation Team and to further the Oversight Board’s goal of building a mediated consensual resolution for PREPA’s Title III Case, the Oversight Board seeks to extend the Term End Date to September 30, 2024,” the oversight board said.
On March 29, 2024, the lead mediator informed the counsel to the oversight board that Assured, the Majority Member PREPA Ad Hoc Group, the PREPA Ad Hoc Group, and GoldenTree did not object to the extension.
Last week, PREPA contractor Cobra Acquisitions called for a trial by the end of September, alleging the electric utility is years overdue in paying hundreds of millions of dollars for performed work.
The judge then ordered all parties to engage promptly with the mediator in reasonable faith efforts to resolve all outstanding disputes with Cobra.
“If the parties’ disputes have not been resolved through payment or mediation, the parties are directed to file, by May 8, 2024, a joint status report,” Swain said.
PREPA and Cobra are still at odds over $73.7 million in charges invoiced by PREPA that the Federal Emergency Management Agency (FEMA) has denied and are being appealed, $69 million under Cobra’s first contract with PREPA primarily related to tax reimbursements, $84 million in interest allegedly owed under that contract, $72 million under a second contract and $112 million in interest under that contract.
“At this time, the government parties have no legitimate basis to claim hardship from having to litigate the administrative expense motion,” Cobra said in the joint status report. “And there is no doubt that Cobra has suffered and is continuing to suffer substantial prejudice from the effectively indefinite stay, including, among other things, the denial of payment (causing Cobra’s own financial challenges), the incurrence of significant legal fees and the potential loss of evidence.”
The money is allegedly owed for work done six years ago after hurricanes Irma and Maria devastated the island.