Legal
Judge Orders Puerto Rico Utility and Creditors to Find Debt Deal
- Court imposes 60-day stay on most filings in bankruptcy case
- Parties may bridge divide with contingent value instruments
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The judge overseeing the bankruptcy of Puerto Rico’s electric utility directed the parties to reach a consensual debt-cutting deal through mediation and put a hold on most legal filings for at least 60 days to force the borrower and its creditors to focus on their negotiations.
US District Court Judge Laura Taylor Swain’s push for a broader resolution through mediation follows an appeals court ruling last month that increased bondholders’ allowable claims to about $8.5 billion from the $2.4 billion limit that Swain had placed on their unsecured lien on the utility’s net revenue.