Sunedison Inc. (fka SUNEQ)

[hawkmd]

SunEdison Has Settlement Offer From TerraForm Power

12/24/2016

SunEdison Inc. Chief Executive John S. Dubel said Thursday that the renewable-energy company has received a settlement offer from spinoff TerraForm Power Inc., which claims its corporate parent caused it more than $1 billion in damages.

Mr. Dubel disclosed the TerraForm Power offer at a hearing in U.S. Bankruptcy Court in New York over a request by SunEdison’s creditors to sue the TerraForm Power and its sister company, TerraForm Global Inc., on the company’s behalf.

Specific terms of the settlement weren’t discussed. However, the offer would resolve SunEdison’s potential claims against TerraForm Power for no money, Mr. Dubel confirmed. SunEdison hasn’t yet made a counteroffer, he said.

SunEdison has been looking to sell its stakes in TerraForm Power and TerraForm Global, valuable assets that could be monetized to help cover company debts. The TerraForm businesses, publicly traded yieldcos established by SunEdison that own renewable-energy projects, have asserted that SunEdison has collectively caused the business in excess of $3 billion in damage.


A lawyer for SunEdison’s unsecured creditors said Thursday that creditors are being cut from sale negotiations and that the company is angling to drop its own lucrative claims against the TerraForm businesses at the behest of more senior lenders.

Mr. Dubel said he is pursuing a transaction involving the TerraForm companies that would maximize value for SunEdison and its various constituents, including unsecured creditors. A financial adviser for SunEdison from Rothschild Inc. later testified that the company is currently unsure whether bankruptcy will yield a recovery for unsecured creditors.

“We would have to look at the whole picture,” Mr. Dubel testified. “My fiduciary duty is to the estate.”

Mr. Dubel became SunEdison’s chief restructuring officer in April after the company had already filed for bankruptcy protection. He was appointed CEO in June following the resignation of former Chief Executive Ahmad Chatila, who steered the business during its debt-fueled expansion.

When SunEdison filed for bankruptcy, its finances and its dealings with the TerraForm companies were under investigation by federal authorities. Once SunEdison units, the TerraForm companies were spun out as separate businesses, designed to raise money from outside investors to buy wind and solar power projects developed by SunEdison.

They helped fuel SunEdison’s boom but suffered from the connection to their former parent once it ran into trouble. Shared accounting systems, for example, meant the TerraForm companies were no more able than SunEdison to file audited financial reports with the Securities and Exchange Commission.

SunEdison and TerraForm companies were already involved in litigation when SunEdison filed for chapter 11 protection. The TerraForm companies aren’t under bankruptcy-court protection.

Write to Jonathan Randles at [e-mail]


(END) Dow Jones Newswires

December 23, 2016 15:35 ET (20:35 GMT)

http://www.morningstar.com/advisor/t/117894271/sunedison-has-settlement-offer-from-terraform-power.htm?&single=true