Evergreen Solar obtains court approval of settlement with noteholders

By Caroline Salls

Pittsburgh, March 6 - Evergreen Solar, Inc. received court approval of a settlement reached with its official committee of unsecured creditors, supporting noteholders and indenture trustee U.S. Bank NA, according to a Tuesday filing with the U.S. Bankruptcy Court for the District of Delaware.

Under the settlement

• The indenture trustee holds pre-bankruptcy and/or post-bankruptcy liens on the company's assets, and the trustee's liens and claims granted under Evergreen's cash collateral order have a value in excess of the value of all of the company's property;

• The indenture trustee holds a $108.3 million deficiency claim, less specified future distributions to the trustee or its designee. The deficiency claim will only share in distributions from an unsecured creditor vehicle after holders of other allowed general unsecured claims have received 1% distribution;

• The committee and supporting noteholders will withdraw an avoidance action, conversion motion and adequate protection motion;

• Evergreen will ask the court to value a disputed HSTIC claim against the company's equity interest in Evergreen Solar (China) Co., Ltd. at $0;

• The indenture trustee's interests in some of the company's assets will be transferred on the settlement effective date for the exclusive benefit of Evergreen's estate for payment of professional fees and expenses and other Chapter 11 administrative and priority claims.

Specifically, Evergreen's estate will receive $1.2 million in cash, $100,000 in cash payable from the proceeds of the sale of Devens assets, 250,000 ordinary shares of China Private Equity Investment Holdings and some causes of action for administrative or priority claims mitigation and/or setoff only;

• The committee will establish an escrow or create a limited liability company, trust or other entity as an unsecured creditor vehicle;

• The indenture trustee's interests in specified assets will be transferred to the unsecured creditor vehicle for the exclusive benefit of general unsecured creditors.

These assets include 3 million ordinary shares of China Private Equity Investment Holdings Ltd., rights to two commercial tort claims and $50,000 in cash for administration of the unsecured creditor vehicle, the shares and the commercial tort claims

• If confirmation of the Chapter 11 plan is denied or the company stops seeking confirmation of the plan, the 250,000 ordinary shares of China Private Equity Investment Holdings would be transferred to the unsecured creditor vehicle;

• Evergreen Solar will release all claims for the avoidance or recovery of transfers in the amount of $59,999.99 or less. Other preference claims would be transferred to the indenture trustee or its designee; and

• Regardless of the disposition of the Chapter 11 plan, the settlement of the adversary action captioned Evergreen Solar, Inc. v. U.S. Bank NA, Wells Fargo Bank, NA and Computershare Trust Co., NA will remain effective against all parties, and the proceeds of that settlement will not be returned to the defendants under any circumstances.

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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