Unsecured creditors want their experts to testify at PREPA debt claim hearing

By The Star Staff

The Puerto Rico Electric Power Authority’s (PREPA) unsecured creditors (UCC) have asked U.S. District Court Judge Laura Taylor Swain to allow their experts to testify at a hearing next week that will seek to determine the size of the bonded debt claims in the public utility’s bankruptcy case.

Swain’s initial procedures order was unclear as to whether she sought declarations from the unsecured creditors’ witnesses, or only those of the Financial Oversight and Management Board and bondholders to be filed ahead of Tuesday’s hearing, the UCC said. The UCC’s witnesses, Julia Frayer of London Economics International and Scott Martínez of Alix Partners, also were not given time for cross-examination or redirect as bondholders and the oversight board witnesses were, the motion said.

The group argued that its witnesses had the right to be heard at the hearing.

Swain ruled on March 22 that the claim amount on bondholders’ outstanding debt be estimated, when she found that the bonds were backed only by a small amount held in a few specific accounts.

Bondholders estimate their claims as the $8.3 billion face value of their debt, while the oversight board has put the amount at no more than $2 billion, and the UCC estimated even less.

Meanwhile, the Center for Investigative Journalism (CPI by its Spanish initials) reported Thursday that for the 2022-2023 fiscal year, the University of Puerto Rico identified $34.5 million for the cost of electricity at its 11 campuses, equivalent to 3% of the institution’s certified budget. However, as the fiscal year is about to close, the estimated total expense for that service increased to $44.1 million, a difference of about $10 million more in expenses. Some campuses, such as Río Piedras and Cayey, experienced even more expenses related to electricity service due to prolonged breakdowns or unexpected needed repairs at electrical substations, according to the CPI report.