Puerto Rico Utility Bankruptcy Risks Dismissal on Debt Plan (1)

Puerto Rico’s bankrupt electric utility may not get another chance to craft a proposal to cut about $9 billion of debt, if the court overseeing its case fails to approve a restructuring plan that most bondholders have yet to accept.

That’s the warning that US District Court Judge Laura Taylor Swain gave Monday to the financial oversight board that’s managing the power utility’s nearly six-year bankruptcy. The judge summoned the parties after they failed to participate in any court-monitored mediation sessions this year even though she ordered such action multiple times.

Calling the situation “frustrating” and “inexplicable,” Swain made it ...