Puerto Rico Electric Power Authority (PREPA) bond trustee U.S. Bank National Association has asked the federal Title III bankruptcy court to be added to a bondholder lawsuit seeking to appoint a receiver for the bankrupt utility.
In a motion last week, PREPA’s bond trustee said it believes just like GoldenTree Asset Management and Syncora Guarantee that there is cause to lift the automatic stay preventing them from seeking a receiver.
“If the renewed motion is granted, the PREPA bond trustee will have ongoing duties under the trustee agreement that may be implicated by the receivership proceedings and the handling of information and PREPA-related assets by any receiver to be appointed,” the bond trustee argued in its motion. “The PREPA bond trustee respectfully requests that any order granting there newed motion include a provision specifying that the automatic stay will not limit or restrict any action the PREPA bond trustee takes pursuant to the trust agreement in connection with the receivership proceedings or the performance of the receiver.”
GoldenTree Asset Management LP, Syncora Guarantee Inc. and holders and insurers of 40% of the estimated $8.29 billion in outstanding PREPA bonds renewed a petition to seek a receiver to take control of the utility in February.
A previous request for a receiver earlier this year was denied by U.S. District Judge Laura Taylor Swain and upheld by the FirstCircuit Court of Appeals, but the bondholders are using an appeals court ruling to file the renewed motion. At the conclusion of its 2024 opinion, the FirstCircuit stated that “it appears the Title III court’s final summary judgment order in the adversary proceeding could open the door to a prompt ruling on are newed (or entirely new) motion for relief.”
Source: The San Juan Daily Star
