Judge’s order outlines PREPA debt mediation process
By The Star Staff
U.S. District Court Judge Laura Taylor Swain, who is overseeing Puerto Rico’s bankruptcy cases, has established the rules that will guide the mediation toward a deal to restructure the Puerto Rico Electric Power Authority’s (PREPA) $9 billion debt with its creditors.
Swain emphasized that the mediation process should end by June 1 unless she authorizes an extension. PREPA has been in Title III bankruptcy since 2017.
Last Friday, the judge entered an order appointing a mediation team, which will be led by Shelley C. Chapman, a bankruptcy judge from the United States Bankruptcy Court for the Southern District of New York. She also appointed Robert D. Drain, also a U.S. bankruptcy judge for the Southern District of New York, and Brendan L. Shannon, a U.S. bankruptcy judge for the District of Delaware. Swain also appointed the Financial Oversight and Management Board, the Puerto Rico Fiscal Agency and Financial Advisory Authority, the Ad Hoc Group of PREPA Bondholders, National, Assured, Syncora, the Electrical Industry and Irrigation Workers Union, PREPA’s Retirement System officials, the Official Committee of Unsecured Creditors, and PREPA’s fuel line lenders as mediation parties.
The judge said the mediation parties can negotiate among themselves without the involvement of the mediation team provided that on or before April 12, the mediation parties consult with the lead mediator on the topics.
The mediation team is authorized and empowered to determine the procedures to govern the process.
“Unless, in the determination of the Mediation Team, a resolution has been reached in the Mediation before such time, the Mediation shall terminate on June 1, 2022, at 11:59 p.m. (Atlantic Standard Time); provided, that the Mediation Team may extend the Termination Date based on its assessment of the material progress of the Mediation but in no event shall extend the Termination Date beyond July 1, 2022, at 11:59 p.m. (Atlantic Standard Time) without this Court’s approval after notice of such proposed extension to parties in interest,” Swain said in the order.
Swain said no mediation party will be bound by anything said or done during the mediation unless the mediation party voluntarily agrees to be so bound by a written and signed stipulation.
All communications made by and all submissions prepared by a mediation party in connection with the mediation, letters and documents will remain confidential and will not be part of the court’s record.
The mediation team will be immune from claims arising out of acts or omissions related to their service and will not be compelled to testify, Swain’s order said.