By The Star Staff
In a recent development, non-settling bondholders of the Puerto Rico Electric Power Authority (PREPA) have called on the court to lift the litigation stay, allowing them to pursue legal avenues to recover their funds.
The bondholders have opposed the Financial Oversight and Management Board’s proposal, which suggested lifting the stay only to the extent that administrative expense claims could be paid from non-net revenue sources.
Non-settling bondholders argue that during PREPA’s bankruptcy, the oversight board has taken billions of dollars in collateral and used it, resulting in an administrative expense claim. However, the board denies these allegations and maintains that even if the bondholders’ claims are proven true, any payments could only come from future net revenues, which are projected to be nonexistent.
The oversight board plans to file a new plan of adjustment by next Monday following a ruling by the U.S. Court of Appeals for the First Circuit that bondholders have an $8.5 billion secured claim. That ruling overturned Judge Laura Taylor Swain’s earlier determination that the bondholders held only a $2.4 billion unsecured claim.
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