Omnibus hearing today as PREPA retirees protest lack of pension fund

By The Star Staff

The Puerto Rico Electric Power Authority (PREPA) Active and Retired Employees Alliance is calling for a demonstration today, three days before the depletion of funds in the Puerto Rico Electric Power Authority’s Employee Retirement System.

The group says some 12,500 retirees are doomed to be left without pensions because no funds have been allocated for the continuation of payments for April and beyond.

They will hold a protest during today’s omnibus hearing to address PREPA’s Debt Adjustment Plan (DAP) in U.S. District Judge Laura Taylor Swain’s courtroom.

PREPA has been in Title III bankruptcy since 2017 to restructure about $9 billion in debt.

The Financial Oversight and Management Board said a new debt adjustment plan it plans to submit, possibly this month, will be consistent with PREPA’s fiscal plan. The oversight board had previously said it would submit a debt adjustment plan on March 17, but that did not happen.

The board has clarified that the proposed amended plan will fully cover the non-settling bondholders’ secured claim, provided the amount is allowable. Additionally, all administrative claims will be paid, as long as the court establishes that the claims are valid and can be paid using assets not connected to the bondholders’ collateral.

Nonetheless, the parties are expected to first litigate certain issues before approving a debt adjustment plan.

Swain has said the unresolved issues pertain to the amount and priority of PREPA bondholders’ claims. Key concerns include determining which funds legally constitute net revenues, assessing the extent to which PREPA bondholders have an administrative expense claim, and evaluating whether any such claim must be paid from funds other than existing or future net revenues.

The judge emphasized that addressing those issues prior to a confirmation hearing would promote both judicial efficiency and the responsible use of party resources.