Judge limits redacted documents in PREPA bankruptcy case

By The Star Staff

The judge overseeing the Puerto Rico Electric Power Authority’s (PREPA) bankruptcy process is ordering more transparency from stakeholders.

U.S. District Court Judge Laura Taylor Swain said in a May 26 order in PREPA’s bankruptcy case that she would only review redacted documents if the court has approved the redactions.

“The court will not review or otherwise utilize any redacted documents that have been sent to the court unless and until parties seek and obtain approval of an appropriate request to file such documents under seal or the parties file the unredacted documents publicly on the docket,” Swain said.

Following a previous order, Swain had permitted PREPA stakeholders to submit redacted documents to the docket and then send to the court unredacted versions. However, she decided to modify her previous order. It is not the first time Swain has ruled for greater transparency. For example, she said on May 15 that the Financial Oversight and Management Board’s “vague and unsupported speculations” about harm from unsealing an expert declaration are insufficient to keep a report secret. She gave the oversight board time to appeal her ruling. The report, in essence, stated that the cost of the energy rate could not be more than 6% of the median household income.

The Title III bankruptcy court will conduct a hearing on Tuesday, June 6 to estimate the size of the debt the bankrupt PREPA can pay to its bondholders, who are insisting on payment in full of the more than $8 billion in bonded debt.

Swain said the parties’ expert witnesses will be required to proffer their direct testimony in declarations, which must be filed by June 1. PREPA has been in bankruptcy since 2017 to restructure nearly $10 billion in debt.

As expected, the oversight board and the bondholders are at odds as to the amounts the bankrupt electrical utility can pay back to the bondholders.