It’s been awhile since I’ve written anything about Puerto Rico, because it’s the “same old, same old.” There has been limited progress on resolving any of the island’s problems, the governor is spending more time campaigning against Trump and Republicans than he is fixing his island’s problems, and stories of incredible corruption continue to bubble up the surface.
This story made me take notice, however. Having grown impatient with the Federal Control Board and the Puerto Rican government to make any progress in resolving the quagmire Puerto Rico is in, the bond insurers want the famously incompetent and corrupt state-run utility company PREPA placed in receivership, so someone who isn’t a political pawn or a crook can force badly needed reforms on the company:
Bond insurance companies that were not part of a preliminary deal to restructure debt issued by the Puerto Rico Electric Power Authority (PREPA) have relaunched litigation seeking a receiver for the bankrupt agency.
The move could signal that Puerto Rico has a ways to go to reach a final deal that includes the insurers.
A motion filed late on Wednesday in U.S. District Court in Puerto Rico by National Public Finance Guarantee Corporation, Assured Guaranty Corp, Assured Guaranty Municipal Corp and Syncora Guarantee Inc asks the judge overseeing the U.S. commonwealth’s bankruptcy case to allow another federal judge to appoint an independent professional to take over the utility’s operations.
“PREPA must be led by a receiver, free from impermissible political influence, with experience and proven expertise managing public utilities in the best interests of all of its constituents,” the court filing stated.
U.S. Judge Laura Taylor Swain last year struck down a previous receiver bid by bond insurers, only to have an appeals court remand the matter back to her in August. The latest motion points to PREPA’s “abysmal” efforts to collect almost $3.4 billion in accounts receivable, a revolving door at PREPA’s helm, and the agency’s “notoriously and catastrophically deficient” response to hurricanes Irma and Maria, which struck the island in September 2017.
Let’s hope the judge sees the merit in the bond insurers’ motion and approves it.