Judge orders Evergreen Solar creditors, noteholders into mediation

By Jim Witters

Wilmington, Del., Jan. 5 - Evergreen Solar, Inc.'s supporting noteholders and its official committee of unsecured creditors must engage in a two-week mediation, judge Mary F. Walrath ruled Thursday in the U.S. Bankruptcy Court for the District of Delaware.

Walrath appointed judge Judith H. Wizmur as mediator.

Walrath also ordered a 13-day stay of contested matters and litigation in the case.

The mediation stems from a creditors committee motion to dismiss or convert the Chapter 11 case.

Debtors' attorney P. Sabin Willett said the cost for attorneys' fees in pursuing litigation places the estate at risk of administrative insolvency.

"The object is to get to a consensual plan of reorganization," he told the court.

If no settlement emerges from the mediation, the debtors plan to seek dismissal of the case, Willett said.

As previously reported, the creditors committee asked the court to dismiss the company's Chapter 11 bankruptcy case or convert it to Chapter 7 because Evergreen has sold substantially all of its assets and continues to accrue administrative expenses.

The creditor group wants the court to

• Dismiss the case and order the return of $3.75 million of unsecured notes to the noteholders; or

• Convert the case, if the court finds that the value of unencumbered assets available for distribution to unsecured creditors is likely to exceed the amount returned to the noteholders upon dismissal.

Evergreen Solar is a Marlboro, Mass.-based producer of solar power. The company filed for bankruptcy on Aug. 15 under Chapter 11 case number 11-12590.

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