Ironically, the low price of oil has hurt not only oil drillers and producers but has affected to some extent the renewable energy industry nationwide, including in Pennsylvania. The most glaring example of that influence can be seen in the impending bankruptcy of solar energy leader SunEdison Company. The company had a market value of nearly $10 billion last summer but has suffered a dramatic turnabout due to a variety of factors.
The company intends to file a Chapter 11 and has opened talks with two groups of creditors expected to end up with an ownership stake in the business by the time the dust settles. The creditors are expected to come up with funding to keep SunEdison intact during the bankruptcy. One of the goals of most Chapter 11 bankruptcies is to restructure the company’s debt load to make it more affordable when the company emerges from the bankruptcy.
Chapter 11, being a reorganization remedy under the Bankruptcy Code, provides several different kinds of ways in which debt can be eliminated or restructured with different payment terms and lower interest rates. New investors can also be drawn into a company during a bankruptcy filing in order to put together a viable plan for the future. In the business world, many investors and creditors view a Chapter 11 as an opportunity to solidify their positions in the company or to get in on the ground floor of a reorganized company with new potential for success.
Furthermore, loans given in the Chapter 11 to the company are fairly secure in that the Bankruptcy Court will approve them for first payment from the company’s assets should a collapse occur. The subject of business bankruptcies, however, is highly complicated both in Pennsylvania and in all other jurisdictions. Even a very small business will find it necessary to consult with an experienced firm of attorneys that handle Chapter 11 cases prior to making any decisions.
Source: foxbusiness.com, “SunEdison Plans To File For Bankruptcy“, April 4, 2016