Suntech Power Holdings Corp., the Chinese solar-panel maker that defaulted on $541 million of bonds, filed for bankruptcy court protection from U.S. creditors as it liquidates in the Cayman Islands.
The company filed its Chapter 15 petition late yesterday in U.S. Bankruptcy Court in Manhattan as part of a restructuring agreement with petitioners seeking an involuntary filing last year. In November, Suntech told the court that the proposed action by U.S. creditors could derail restructuring efforts.
“The Chapter 15 petition is a very important step to conclude a successful restructuring of the company as it would allow a centralized process to assert and resolve claims,” said David Walker, a joint provisional liquidator, in a statement today. “Chapter 15 recognition will stay actions brought by creditors in the U.S., and help ensure that all creditors are treated equally.”
Wuxi, China-based Suntech, the world’s biggest solar-panel maker in 2011, is incorporated in the Cayman Islands and has no operations or significant assets in New York, according to the company. It had $541 million of senior notes outstanding and a $50 million convertible loan, according to court papers.
The company’s main unit was pulled into bankruptcy proceedings by Chinese banks after it missed a bond payment in March. Shunfeng Photovoltaic International Ltd., agreed to buy the unit for 3 billion yuan ($492 million).
Trondheim Capital Partners LP, Michael Meixler and Longball Holdings LLC filed the involuntary petition under Chapter 7 of the U.S. Bankruptcy Code in New York on Oct. 14. They said they held $578,230.68 in claims against the company.
The creditors seeking the U.S. bankruptcy are a “tiny minority,” holding only 0.27 percent of the company’s debt outstanding, Suntech said in papers filed Nov. 6 seeking to have the case dismissed.
The action could “derail the substantial progress Suntech has made in reaching a consensual restructuring with a wide array of its stakeholders, including a substantial percentage of its funded debt creditors,” the company said at the time.
The case is In re Suntech Power Holdings Co.; 14-10383, U.S. Bankruptcy Court for the Southern District of New York (Manhattan.)