Renewable energy company SunEdison is exiting Chapter 11 bankruptcy, but as a much smaller company.
Under the court agreement, second lien debtholders will own 90% of SunEdison’s new common stock and 90% of its Class A shares, while the company’s original shareholders will receive nothing, Bloomberg reports.
- The bankruptcy court settlement resolves some lawsuits stemming from SunEdison’s demise, but the company could still face suits over fraud, willful misconduct or gross negligence and a shareholder suit is still ongoing.
SunEdison declared bankruptcy after a proposed $1.8 billion merger with Vivint Solar fell apart. Running up to bankruptcy filing, SunEdison had gone on an acquisition spree and racked up $11.7 billion in debt, more than double its debt load the year before.
SunEdison’s bankruptcy also prompted the sale of the company’s yieldcos, specialized vehicles designed to hold renewable energy assets and pay high dividends. TerraForm Power and TerraForm Global had 2,987 MW and 917 MW of capacity, respectively. In March, Brookfield Asset Management bought TerraForm Global and a controlling stake in TerraForm Power.
In approving SunEdison’s bankruptcy plan, U.S. Bankruptcy Judge Stuart Bernstein overruled the objections from shareholders and two investors. Under the court approved deal, unsecured SunEdison creditors will receive $32 million in proceeds of directors and officers’ insurance settlements and $18 million as a result of negotiations with the yieldcos. Secured creditors will be repaid in full with cash.
“SunEdison flew too close to the sun and landed in Manhattan bankruptcy court,” Nathan Serota, an analyst with Bloomberg New Energy Finance, told Bloomberg. “During the Chapter 11 process, the company lost nearly all of the assets and personnel that -- for better or worse – defined it in the first place.”