Sunedison Inc. (fka SUNEQ)

[Strategyone]

BINGO!!!!!

I think at this point it's important to remember why they filed bk. It was voluntary and for liquidity reasons.

It amazes me how many don't seem to get what this chapter 7 is all about.

This is a "short term" cash flow restructuring process. Once SUNE turns cash flow positive, they will have the business model back in line to pay off the long term debts over time.

They still need to successfully restructure so I am not saying this goes without risk but the reality is SUNE is working through the bad business model they had in place to convert it to a good business model to pull out of chapter 7. They did NOT go into chapter 11 to liquidate all and close the doors.

Some state here the argument that if bond holders don't get back 100% then shareholders get zero. Unfortunately, for bond holders, that argument is not exactly correct. They WISH they would get back 100% first and they would have been in line before shareholders if this was in chapter 11. BUT, bondholders have the additional restriction of their claim as TIME. Corporate bonds owe specific payments at specific TIME with a given interest rate to compensate for risk. Once the risk factor is changed (as is the case here) the value of those bonds goes down (tremendously in this case because of the cash flow needs not being able to match up with the contracted TIME needs). Therefore, if you are a bond holder and now see the "possibility" of your future payment NOT being met, you "may" be willing to accept a smaller payout sooner - hence the restructuring of the debt. For bond holders, it is better to get something back than nothing so it is pure negotiation at that point. Once the debt is restructure, the business model can move forward as a successful and EQUITY building entity.

Good luck all, this one is going to be fun to watch evolve.