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Federal judge orders mediation to break Puerto Rico energy company debt impasse – Winnipeg Free Press

SAN JUAN, Puerto Rico (AP) — A federal judge overseeing a long-running debt restructuring process for a Puerto Rican energy company ordered all parties to mediation Wednesday, another attempt to break an impasse that has sparked widespread outrage.

The U.S. Territory Electric Power Authority has more than $10 billion in debt and other liabilities — the most of any government agency on the island — and efforts to restructure it in recent years have failed, limiting the island’s ability to attract investment and leaving residents who already pay some of the highest electricity bills in U.S. jurisdictions in limbo.

“Movement is necessary to resolve this case,” U.S. District Judge Laura Taylor Swain said during a two-hour hearing in New York. “I need an answer quickly.”

FILE – An Electric Power Authority crew repairs distribution lines damaged by Hurricane Maria in the community of Cantera in San Juan, Puerto Rico, Oct. 19, 2017. A federal judge overseeing the power company’s drawn-out debt restructuring process ordered all parties to mediation Wednesday, July 10, in the latest attempt to break a stalemate that has sparked widespread anger and frustration. (AP Photo/Carlos Giusti, File)

Swain also suspended the legal proceedings for two months and called on all parties to immediately take steps in good faith to reach a compromise.

“Please keep the people of Puerto Rico in mind as you take these actions,” she said.

Swain’s decision came nearly a month after the First Circuit Court of Appeals in Boston reinstated $9 billion in bondholder claims following the energy company’s bankruptcy. But the federal control board that oversees Puerto Rico’s finances noted that the energy company has no net income from which to pay bondholders.

As a result of the June ruling, Swain is tasked with determining how much bondholders will be able to collect. But first, the board and bondholders will go to mediation, with many doubting any outcome.

Shortly before Wednesday’s ruling, lead mediator Judge Shelley Chapman said it was impossible not to feel “enormous frustration and disappointment” at the lack of compromise. She noted the continued lack of proposals or solutions, urging all parties to take “modest steps.”

“The mediation team is fully aware of the suffering of the Puerto Rican people” in the face of thwarted efforts to restructure the energy company’s debt, she added.