The federal court overseeing the Puerto Rico Electric Power Authority’s (PREPA; AEE in Spanish) bankruptcy has extended the appointment of the lead mediator handling settlement negotiations through April 1, 2027. U.S. District Judge Laura Taylor Swain on Friday granted an urgent request from the Financial Oversight and Management Board, extending and ratifying the lead mediator’s appointment for another six months.
The extension can be renewed again if necessary. The order itself offers little explanation beyond finding that the relief is in the best interests of PREPA, its creditors and other parties involved in the Title III proceedings under the Puerto Rico Oversight, Management and Economic Stability Act (PROMESA). The move is described as evidence of the continuing difficulty of reaching a consensual resolution nearly 10 years after the utility entered bankruptcy.
PREPA filed for bankruptcy protection in 2017 under PROMESA, following years of financial deterioration, and the case is approaching its 10th year without a confirmed plan of adjustment. Court-appointed mediation has been a central feature of the proceedings, serving as the primary forum for negotiations among bondholders, labor groups, government officials and other stakeholders with competing interests in the utility’s future.
Swain’s order also leaves in place prior rulings governing the mediator’s role, including the appointment of Willkie Farr & Gallagher LLP as special adviser to the lead mediator and an earlier order approving an increase in the firm’s monthly compensation.