Evergreen Solar Wins Approval to Sell Most of Its Assets
Evergreen Solar Inc. (ESLR), a bankrupt solar-panel maker, won court approval to sell most of its assets, including a sale of its core wafer assets to a Hong Kong-based company.
U.S. Bankruptcy Judge Mary F. Walrath at a hearing today in Wilmington, Delaware, approved three sales today to three different buyers, after the company held an auction earlier this week.
Evergreen will sell its core wafer assets to Hong Kong- based Max Era Properties Ltd. for about $9.2 million, comprised of $6 million in cash and $3.2 million in unrestricted ordinary shares of China Private Equity Investment Holdings Ltd. (CPEH), according to court documents.
The core wafer assets consist of intellectual property for Evergreen’s so-called “wide wafer” technology used to produce solar panel cells, and interests in a Chinese joint venture. Three “Gemini patents,” in which the Department of Energy claims to hold rights and aren’t useful to the production of the wide wafer technology, aren’t included.
“It’s bittersweet,” P. Sabin Willett, a lawyer for the company, said in an interview after the hearing. “We are happy we completed the sale but it’s sad for the solar industry which has become a political football.”
The company, based in Marlboro, Massachusetts, will sell a claim of about $171 million against an affiliate of bankrupt Lehman Brothers Holdings Inc. to its 13 percent senior secured noteholders for $21.5 million in debt forgiveness, court papers show. The noteholders are also the back-up buyer for the core wafer assets if Max Era fails to close.
The company sold its solar panel inventory to Kimball Holdings LLC for about $3.8 million, according to court documents.
The sales will result in “essentially a mass reduction in force of virtually everybody as soon as next week,” said Steven Wilamowsky, an Evergreen attorney. The company originally planned the sale intending for the buyer to keep operating the business as a going concern. No potential buyer expressed any interest in keeping the employees.
Employees who will be losing their jobs will receive their severance, Wilamowsky said. “We want to give them their full entitlement in a lump sum in cash at the time of their termination,” Wilamowsky told Walrath.
The company didn’t sell its 450,000-square foot manufacturing facility located in Devens, Massachusetts, which it closed earlier this year, according to court papers.
Evergreen filed for bankruptcy in August, blaming increased competition from government-subsidized solar-panel makers in China and the failure of the U.S. to adopt clean-energy policies. The company had 133 U.S.-based employees when it filed bankruptcy, some of which were fired during the course of the bankruptcy. The company listed about $485.6 million in debt and about $424.5 million in assets when it filed.
The case is In re Evergreen Solar Inc. 11-12590, U.S. Bankruptcy Court, District of Delaware (Wilmington).
To contact the reporter on this story: Michael Bathon in Wilmington, Delaware, at email@example.com.