Sunedison Inc. (fka SUNEQ)

[FEED_THE_FOXES]

You are missing the fundamental flaws in SUNE that were present from the moment they got into the renewables development business.

First, they grossly overpaid and overspent to buy and/or develop projects and NEVER made a profit doing so. For example, they paid over a $1 billion premium for First Wind who in turn never made a profit in almost a decade. Energy projects have always been financed with high levels of debt but SUNE took it to the next level with complicated and convoluted cross-collateral guarantees. It was in affect a pyramid of air.

Second, SUNE never had the financial controls and processes in place to reflect the scope and depth of its complicated financings and cash flows. They were living on a false sense of security since they had a history of being able to borrow more funds (there are lots of dumb lenders out there). The Bankruptcy process has clearly shown over the past nine months how difficult it has been to unwind and sell their assets.

And third, the yieldcos are no picnic either. They were FORCED to take projects from SUNE they didn't want at high prices they didn't want to pay. If you think that there is going to be a claw-back from two public companies that are on their path to total independence then you do not understand bankruptcy law.