It appeared Judge Laura Taylor Swain is leaning toward ordering more mediation in the Puerto Rico Electric Power Authority bankruptcy case.

She directed the mediators on Tuesday to provide a proposal by Sept. 26 that offers “additional provisions” to “overcome obstacles.”

Swain cancelled a virtual court hearing on PREPA’s bankruptcy, scheduled for Wednesday, vowing to reschedule it for a future date.

She also extended the deadline — to Sept. 26 from Sept. 19 — for bankruptcy parties to file responses to the board’s Saturday termination of mediation and extended the deadline for replies to the responses to Sept. 27 from Sept. 20.

On Saturday the Oversight Board ended the mediation process after five months of discussions, saying there were major divergencies over the nature of a reasonable settlement and on legal issues, and suggested the parties should start a several month-long litigation to settle issues.

The bondholders’ group, which includes three bond insurers, called for either the dismissal of the bankruptcy or a lift on the bankruptcy’s stay on litigation. If the judge granted either, the group said it would seek a receiver for the authority.

The fuel line lenders said the board’s efforts to restart long-dormant Current Expense Proceedings to deal with their claims made no sense and was illegal.

The board responded Tuesday to the bondholders and fuel line lenders’ objections, saying the Fiscal Agency and Financial Advisory Authority and the Unsecured Creditors Committee support the board’s approach.

“PREPA must first determine the extent of allowed claims against it, and their relative priorities, before proposing a plan that meets the confirmation requirements and policy directives of PROMESA,” the board said. “Creditors lacking allowed claims have no basis to litigate PREPA’s ability to pay.”

The board said the legal issues could be “swiftly adjudicated.”

Swain’s ruling on Highways and Transportation Authority bonds and the nature of the bondholders’ lien increased the board’s confidence in its legal position, the board said.

The board said the Current Expense Adversary Proceedings are ripe for adjudication.

“Actions that threaten Puerto Rico’s sole electric utility jeopardize the entire territory, including its residents and businesses,” the board said. “The bondholders’ position imperils all Title III and Title VI restructurings to date.”

In a separate development, a group of PREPA retirees filed their response to the board about nine hours after the original Monday deadline. Their lawyers criticized Swain for her “unconscionable” refusal to extend the deadline for response during Hurricane Fiona. The lawyers said they were unable to reach their clients as a result of the hurricane.

The lawyers said the retirees group agreed with the fuel line lenders’ position.