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Swain imposes stay on PREPA bankruptcy case

Swain imposes stay on PREPA bankruptcy case

In one of the most intense hearings since Puerto Rico’s government filed for bankruptcy, Federal District Judge Laura Taylor Swain on Wednesday ordered a stay of all judicial proceedings related to Title III. Electricity Authority (AEE) and ordered Financial Supervisory Board (JSF), the bondholders of the public corporation and other interested groups shall immediately enter into the negotiation process with the assistance of the Mediation Committee.

The resolution came about an hour and a half after Swain heard comments from attorneys about how to move forward with PREPA’s bankruptcy process. This follows the June 12 decision of a First Circuit appeal that largely favored the public corporation’s bondholders.

After all, the 60-day moratorium and the express admonition to the parties to sit down at the negotiating table was the culmination of a conference session in which, for the first time in seven years, the judge slammed the board and bondholders against PREPA, which objected, using the terms “myopic” and “delusional” to describe their positions. They insist the deal is “a failure and an act of indignity and lack of compassion” on the people of Puerto Rico. The judge described it as “unacceptable” that the people of Puerto Rico, in particular, are being overwhelmed by the heat at the moment, paying high electricity bills in exchange for already unreliable service.