PREPA mediation team signals it has ‘little left to do,’ pauses work as talks stall

Shelley C. Chapman (Ret.), co-leader of the court-appointed mediation team overseeing the Puerto Rico Electric Power Authority’s restructuring 

By THE STAR STAFF

The court‑appointed mediation team overseeing the Puerto Rico Electric Power Authority’s (PREPA) restructuring has effectively stepped back from the process, saying the current circumstances leave it with little to do.

In its Twenty‑Third Notice and Report, filed Monday, the mediation team, headed by Shelley C. Chapman (Ret.) and Brendan L. Shannon, delivers its most sober assessment to date of PREPA’s Title III impasse. The mediators said they have paused PJT Partners’ services as financial advisers due to the stalemate.

“Unfortunately, there is little for PJT to do in the current circumstances,” the mediation team writes, announcing that it has paused the services of PJT Partners, its financial adviser, effective Aug. 16.

The report notes several compounding factors:  Since October 2025, the Financial Oversight and Management Board has operated with only four members after attempted removals led to litigation and a preliminary injunction. The mediators note that “uncertainty regarding the composition of the Oversight Board remains” and is likely to persist.

The U.S. Court of Appeals for the First Circuit, according to the mediators, will hear oral argument in September on the PREPA bondholders’ administrative expense appeal. Meanwhile, discovery and summary‑judgment briefing under the May 2026 schedule will run into November -- and the mediation team warns that decisions in these matters “are likely to be appealed.”

They also noted PREPA’s last certified fiscal plan is from February 2025. No updated plan has been certified. The oversight board’s adviser, BGC Partners Advisory, ended its engagement in September 2025. No replacement has been hired.

A June 30, 2026 proposal to bondholders “failed to garner support,” and the board has not filed an amended plan of adjustment since.

The mediation team’s mandate currently runs through Oct. 31 of this year, but the report offers no indication that meaningful negotiations are underway or imminent. With litigation dominating the calendar, an unsettled oversight board, and no active plan negotiations, the mediators’ message is unmistakable: the PREPA restructuring effort is effectively frozen until external conditions change.

For stakeholders, creditors, and Puerto Rico’s energy sector, the report marks a sobering acknowledgment that the long‑running PREPA case has entered yet another period of drift, with the mediators themselves stepping back until there is something to mediate.