(Bloomberg) -- The judge overseeing the bankruptcy of Puerto Rico’s electric utility extended a halt on litigation related to the case as the power provider negotiates with bondholders on how to reduce its debts.
US District Court Judge Laura Taylor Swain continued the stay through Jan. 31 and again instructed the parties, including principal members, to participate in restructuring talks, according to a court filing Tuesday. This is the third time that Swain has granted the mediation team’s request to delay lifting the stay.
Puerto Rico’s Electric Power Authority, called Prepa, is seeking to cut $10 billion of bond debt and other obligations through a bankruptcy that’s been going on for seven years. The US Court of Appeals for the First Circuit in June ruled bondholders’ allowable claims to be about $8.5 billion, exceeding the $2.4 billion ceiling that Swain had earlier placed on their unsecured lien on Prepa’s revenue.
The parties are waiting to see if the appeals court will grant a request from Puerto Rico’s financial oversight board — which is managing the power utility’s bankruptcy — to hold a rehearing of its June decision.
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