Bankruptcy Law News

Puerto Rico Utility Restructuring Deal Faces Creditor Blowback

Oct. 31, 2019, 8:17 PM

Creditors in Puerto Rico’s bankruptcy-like cases urged a federal judge to reject a proposal to restructure about $8.5 billion of the territory’s electric utility bonds, charging the deal improperly elevates the bondholders’ security interest.

The restructuring agreement to cut the Puerto Rico Electric Power Authority’s debt by roughly $3 billion through a bond exchange would bind the island to a “deeply flawed” deal, according to an Oct. 31 filing by a committee of unsecured creditors.

The committee accused the Puerto Rico government and the federal oversight board steering the island’s financial overhaul of giving PREPA’s investors an overly rich deal...

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