Joel R. Glucksman
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Solar panel manufacturer files for bankruptcy
Author: Joel R. Glucksman
Date: February 28, 2014
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Suntech Power Holdings Corp. filed for protection under Chapter 15 of the bankruptcy law on February 21. The solar panel manufacturer recently defaulted on $541 million worth of bonds, according to Bloomberg News, and is filing for protection from its U.S. creditors while it liquidates in the Cayman Islands.
“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 joint provisional liquidator, David Walker, in a statement. “Chapter 15 recognition will stay actions brought by creditors in the U.S., and help ensure that all creditors are treated equally.”
While the company has no significant presence or holdings in New York, it filed the petition with a U.S. Bankruptcy Court in Manhattan, according to the news source. The company’s main unit was involuntarily pulled into bankruptcy proceedings when Trondheim Capital Partners LP, Michael Meixler and Longball Holdings LLC filed under Chapter 7 of the bankruptcy code. At the time, they held almost $580 million in claims against the manufacturer.
Suntech Power Holdings Corp. is seeking to have the filings dismissed, saying in a statement that the creditors seeking the U.S. bankruptcy hold a small minority of the company’s outstanding debt – 0.27 percent. According to the company, a bankruptcy 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 solar industry took on significant debt between 2009 and 2011 as demand increased for solar energy, according to Business Day. Manufacturing outpaced demand, however, and solar panel makers were forced to write down debt.
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