PREPA administrative expense litigation restarted

U.S. District Decide Laura Taylor Swain restarted litigation of the Puerto Rico Electrical Energy Authority bondholders’ $3.7 billion administrative expense declare Wednesday. 

Work on the declare has been paused since August, when President Trump dismissed 5 after which a sixth member of the seven-member Puerto Rico Oversight Board. 

Swain advised events they need to create a schedule for discovery on the executive expense matter: what ought to be sought and produced. 

A joint standing report on discovery schedules and content material proposals is due by Nov. 24. 

At Wednesday’s Puerto Rico omnibus listening to, attorneys for the board, the PREPA Advert Hoc Bondholder Group, Puerto Rico’s Fiscal Company and Monetary Advisory Authority, and the Unsecured Collectors Committee mentioned they have been in favor of restarting discovery discussions.

Legal professional Thomas Lauria, representing GoldenTree Asset Administration, mentioned given the uncertainty in regards to the composition of the board and the significance of this challenge, GoldenTree most well-liked delaying motion till the December omnibus listening to so long as its rights could be reserved.

The cash from the $3.7 billion administrative expense declare could be used primarily to compensate bondholders for the freeze on funds because the 2017 begin of the PREPA chapter. It could not affect the greater than $8 billion in principal the bondholders say they’re owed.

G. Eric Brunstad Jr., lawyer for the PREPA Advert Hoc Bondholder Group, advised Swain that in the previous couple of months the group of funding homes led by BlackRock shifted alliance and now oppose the board’s proposed bond restructuring deal. He mentioned holders of 92% of PREPA’s bonds formally indicated their opposition to the proposed deal.