Evergreen Solar's partial equipment sale OK'd; negotiations continue

By Jim Witters

Wilmington, Del., March 26 - Evergreen Solar, Inc. received court approval Monday for the $133,000 sale of some of the equipment at its closed manufacturing plant in Devens, Mass., while negotiations continue with at least two potential buyers for the bulk of the remaining assets.

Judge Mary F. Walrath ruled that the existing bids represent the highest and best value for the estate despite statements from China Growth Energy, Ltd. that it hoped to buy all the Devens equipment.

During the second day of a hearing in the U.S. Bankruptcy Court for the District of Delaware, Walrath found that the China Growth offer had "no meat on its bones."

Offer made in court

China Growth attorney Leodis C. Matthews said his client was willing to buy all the equipment at the Devens facility for $678,000 plus $680,000 in cleanup and removal costs. He offered to place a $178,000 deposit in escrow immediately, with the balance to transfer within 48 hours of the court order.

The debtors, the consenting noteholders and the company that bought the Devens property and plant, 112 Barnum Road, LLC, objected to China Growth's offer, saying they had no confidence that China Growth would fulfill its obligations and meet deadlines for removing the equipment.

Escrow disputes

Debtors attorney Steven Wilamowsky said talks with China Growth continued to sputter when he sought protection for his client in the form of a higher escrowed amount. Specifically, Wilamowsky sought a deposit of the proposed purchase price, the cleanup costs and $1.38 million more.

The $1.38 million represents the escrowed amount the debtor's estate would forfeit to 112 Barnum Road if the debtor fails to meet a May 31 deadline to remove the equipment from the Devens plant.

William Moorman, representing Hackman Capital Acquisition Co., LLC and 112 Barnum Road, said his client would lose money and prospective tenants if the buyers of the equipment fail to meet the May 31 deadline.

James R. Savin, representing the consenting noteholders, said he fears the China Growth cleanup escrow may not cover the actual costs of cleanup and removal of the equipment.

The estate received bids for the job that, in some cases, were double the amount China Growth discussed.

Matthews said his client has bids from companies at the $680,000 price who promise to meet all the deadlines.

Wilamowsky said the debtor has not reached terms with China Growth on the conditions under which the escrowed funds would be released to the debtor's estate should China Growth default.

History of default

As previously reported, China Growth defaulted after submitting the winning bid of $2.7 million for all of the Devens facility equipment at a Dec. 13 auction.

The parties remain embroiled in litigation involving that default.

China Growth was seeking a resolution of that case as part of its new bid for the Devens equipment. But Wilamowsky, Savin and Moorman said no such settlement has been discussed.

Moving forward

With the sale of two lots of equipment approved March 26, the debtors are continuing negotiations with China Growth and with 112 Barnum Road for the sale, cleanup and removal of the remaining equipment, Wilamowsky said.

Any asset purchase agreement for that equipment must come before judge Walrath for approval.

Evergreen Solar is a Marlboro, Mass.-based producer of solar power. The company filed for bankruptcy on Aug. 15, 2011 under Chapter 11 case number 11-12590.

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