Sunedison Inc. (fka SUNEQ)

[FEED_THE_FOXES]

It seems the market got excited today when Bloomberg reported anonymously that SUNE was looking into a restructuring plan that included the option of holding onto the yieldcos. Just remember that the DIP secured lenders hold all the cards and the SEC website has advice for such bankruptcy circumstances:

“Note: Investors should be cautious when buying common stock of companies in Chapter 11 bankruptcy. It is extremely risky and is likely to lead to financial loss. Although a company may emerge from bankruptcy as a viable entity, generally, the creditors and the bondholders become the new owners of the shares. In most instances, the company's plan of reorganization will cancel the existing equity shares. This happens in bankruptcy cases because secured and unsecured creditors are paid from the company's assets before common stockholders. And in situations where shareholders do participate in the plan, their shares are usually subject to substantial dilution.”