SunEdison Gets Some Money to Tide It Over, But No Examiner Yetby and
SunEdison Inc. will have to wait to learn whether and how an independent examiner will investigate the renewable energy giant’s pre-bankruptcy dealmaking, as well as whether its final operating loan can go forward.
The day after SunEdison filed the year’s biggest U.S. bankruptcy, Judge Stuart Bernstein said the company can draw $90 million from the $300 million operating loan. A complete financing package, and the examiner motion, will be considered at a hearing on May 10.
The company would look at any competing loan offers if they are presented in the next few weeks, said Jay Goffman of Skadden Arps Slate Meagher & Flom LLP, who represented SunEdison at Friday’s hearing in Manhattan.
SunEdison filed for bankruptcy Thursday, listing $16.1 billion of debt, after a $3.1 billion buying spree in 2014 and 2015 that eventually went sour with the failure of a proposed acquisition of Vivint Solar Inc.
Some creditors said that SunEdison’s bid to fast-track an examiner’s probe is an attempt to “dictate the size, shape, temperature and opacity of the fishbowl that the debtors just jumped into” and that the company shouldn’t be the one to set the terms for such an investigation, including which creditors can participate.
David Tepper’s Appaloosa Management LP, which pursued litigation over the Vivint deal, also said it opposed the examiner motion.
Bernstein said there was no need to hurry in choosing an examiner or defining the scope of a probe, as the company has already drawn scrutiny from the U.S. Justice Department and Securities and Exchange Commission.
“You’re under investigation anyway,” he said, adding that creditors should have a chance to weigh in on the matter.
SunEdison had asked that an examiner be named immediately with instructions to deliver a report within 60 days. A more open-ended investigation would jeopardize anticipated sales in the company’s deal pipeline, it said. While SunEdison said it wasn’t aware of any wrongdoing, it cited “negative events” that precipitated a liquidity crisis, including the failed Vivint deal.
Goffman said that without an early, quick probe, the business will suffer.
“It becomes a food-fest for the lawyers, but doesn’t advance the cause,” he told the judge Friday.
The case is In re SunEdison Inc., 16-10992, U.S. Bankruptcy Court, Southern District of New York (Manhattan).