U.S. District Judge Laura Taylor Swain used the general Title III hearing to reaffirm that litigation between objecting bondholders of the Puerto Rico Electric Power Authority (PREPA) and the Fiscal Oversight Board (JSF) must produce a clear path to determine what the utility ultimately owes, with the process to be completed or well advanced by November. The update came hours after PREPA’s objecting bondholders rejected the JSF’s June 1 offer.
Swain is overseeing discovery in an accounting claim brought by GoldenTree Asset Management, Assured Guaranty and other creditors, and stressed that legal disputes must be resolved before calculators are used to set a bond debt figure. She noted Judge Judith Dein is helping keep the litigation on the May 12 order’s schedule. Attorneys Diana Pérez Seda, Margaret Dale, María DiConza, Glenn M. Kurtz and William Natbony updated the court on witness depositions and evidence gathering.
It emerged that external auditor KPMG will deliver PREPA’s fiscal year 2018 audit file to bondholders. PREPA invoked confidentiality privilege over about 100 pages of the roughly 3,970-page file, according to DiConza, a partner at O’Melveny Myers representing Aafaf, covering roughly 3.5% of the file; the government will prepare a log of privileged documents for Assured Guaranty.