NEWS - David Tepper's Appaloosa Management LP is calling for an independent bankruptcy probe of SunEdison Inc. ,
the solar power project developer that filed for chapter 11 protection amid failed deals and federal probes.
Appaloosa is a shareholder of TerraForm Power Inc. , one of two companies spawned by SunEdison as part of the financial engineering that fueled its growth.
Beginning last year, SunEdison's finances began declining almost as swiftly as they had grown, as investors lost confidence it would be able to cover a mounting pile of debt with profits from alternative energy projects.
Appaloosa helped push SunEdison down the path to bankruptcy with Delaware court action over a $1.9 billion merger with Vivint Solar Inc. that involved TerraForm Power . The deal was scrapped earlier this year after banks balked at providing the funding.
Litigation continues, with Appaloosa seeking permission to unseal papers from the Delaware case. Bankruptcy creditors would like to know what the hedge fund found out about SunEdison's activities last year, when it was seeking to save the Vivint deal, lawyers for the hedge fund contend.
"Appaloosa has become familiar with the questionable prepetition conduct of SunEdison's senior management symptomatic of the myriad reasons why the appointment of an examiner is appropriate in these cases," lawyers for the hedge fund wrote in a filing Tuesday in a New York bankruptcy court.
Representatives of SunEdison and affiliates TerraForm Power and TerraForm Global Inc. declined to comment.
In an unusual move, SunEdison asked on the first day of its bankruptcy proceeding to have an examiner appointed. Judge Stuart M. Bernstein delayed a ruling on the request from the company, which followed on the heels of admissions from SunEdison that it is being investigated by the U.S. Justice Department and Securities and Exchange Commission .
The Justice Department and SEC are looking into SunEdison's prebankruptcy dealings, issues that are also expect to get the attention of creditors.
Write to Peg Brickley at peg.brickley@wsj.com and Tom Corrigan at tom.corrigan@wsj.com
(END) Dow Jones Newswires
05-03-16 1731ET
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