Judge Laura Taylor Swain agreed to a request by the board and other parties in the case to suspend the confirmation program because a new funding plan for PREPA will be presented this week.
The Debt Adjustment Plan (PAD) confirmation process of the Public Electricity Authority (PREPA) was suspended today without a renewal date due to the delay in the submission of a new financial plan by the Financial Supervisory Board (JSF) for the company and the expectation that the issuance of this document this Friday may result in substantial changes in the proposed PAD.
PREPA’s bankruptcy judge Laura Taylor Swain’s decision was filed today after a motion filed by the board with the consent of other parties in the case, including creditors.
In his suspension order, the judge made no further disclosures beyond mere formalities, but on May 8 he said he was “disappointed” by the delay in the funding plan and announced that he did not intend to allow further changes. PAD will threaten the start of the confirmation hearing on July 17. At the hearing in May, the financial institution’s legal representation only indicated that the financial plan would bring about significant changes in the energy consumption plan made by LUMA. However, in a motion this week, the lenders point out that the same advisers to the board are working on these projections with LUMA and thus expect the funding in this case to match the company’s needs. “If nothing else, this story shows that the board is unable to reliably and reliably project PREPA’s consumption or income,” bondholders said.
According to the calendar proposed by PREPA in March, PREPA’s new financial plan will be ready by June 2. But later the board changed the deadline to June 9, then June 16, and now June 23.
Why is financial planning a steering wheel? The PROMESA Act states that in order to be approved by the Court, it must comply with a financial plan, the same Act states that only the Board and no one else, not even the Court, has the final say. Certificate of tax plan.
The litigants, the citizens and the Board itself have submitted their objections to the proposed PAD. The judge had comments in this regard, but now the notice suspended due to possible amendments means that a good part of that effort is no longer useful and analysis and fresh arguments on the amended PAD must begin again. According to the lenders, this is a waste of “tens of millions of dollars” paid by the people of Puerto Rico.
The judge had already set aside some interim deadlines ahead of the confirmation hearing. The entire process was suspended today after motions by the parties to confirm that they had a “consensus” that the delay in the financial plan made the July 17 report unacceptable.
“The Board expects and wishes to move expeditiously towards confirmation of the Certification of Financial Plan 2023 (PAD) and identification of necessary amendments… In the June 28 status report, the Board expects information on whether there are reapplications. The requirement and, if so, when a supplemental disclosure statement and a full amendment to the (PAD) is filed, and the path forward for confirmation,” the lawyer told the judge, recalling that it usually took two weeks between certification. A tax plan and applied to it. Samples and data may be shared with lenders.
On the other hand, a major group of lenders criticized the board.
Bondholders agree that the Board’s recent announcements make the existing stabilization program unsustainable. However, they did not pre-agreed on any ‘path to assurance’ that the Board might propose. Instead, the bondholders submit that the Board’s repeated failures to comply with the deadlines they set for certifying a financing plan and complying with this Court’s planning orders constitute an undue delay affecting PREPA’s creditors. and Puerto Rico”, they pointed out.
“Bondholders have done everything possible to give the Board (PAD) one more chance to keep this six-year bankruptcy case on track for a July confirmation hearing. In contrast, the Board is acting as if the confirmation schedule is discretionary and subject to last-minute changes by fiat. A different adjustment plan not contemplated in previous court orders. The Board feels it can submit now. In fact, at the May 8, 2023 status conference, the Court specifically stated that if the Board could not confirm the current (PAT), it would not be willing to give the Board the time and money to develop another strategy. Take it or leave it plan. Rather than risk this decision, the Board has accepted permission to submit a new financing plan and expressed its intention to do so this Friday. Bondholders reserve all rights to object to the new (PAT) offer at this stage of the process”, they had said in an earlier motion.
“After six years of bankruptcy, these maneuvers (by the board) must be put to an end,” they insisted.
The Puerto Rico government said of the suspension that “[s]If the Board needs more time to address whether (PAD) is affordable, feasible and sustainable in light of PREPA’s Financial Plan 2023, (we believe) it should do what is necessary to fulfill its statutory responsibilities and obligations.” “1) The Board will do everything in its power to keep electricity bills affordable and 2) protect Puerto Rico’s economy and the operation of PREPA by ensuring that its restructured debt remains sustainable,” they asserted.
In an exercise that Judge Swain held parallel to PAD’s determination, the board argued that the creditors could collect from the trustee under the scheme $2,000 million, of which more than $8,000 million of debts had accumulated. Bondholders, on the other hand, said the plan would allow them to collect all their debt. The submitted PAD reimbursed the bondholders about $5,000, but they did not accept it.
Apart from the issues in the calendar for the confirmation of PAD, the judge will issue a decision on the rights in law and how much the debtors can recover according to his previous confirmation. Future income, but only a small portion is guaranteed and they have to try to recover the rest through the trustee’s mechanism.
See:
The renewable energy boom continues to confound the PREPA bankruptcy
The board shows the bondholders and Swain how confusing a trustee can be in PREPA
© 360 Telecom Corporation
:quality(85)/cloudfront-us-east-1.images.arcpublishing.com/infobae/VWWQ37HV5ZERLPFWQKUG6JD2CQ.jpg)