Evergreen Solar disclosure statement approved; confirmation July 13

By Jim Witters

Wilmington, Del., June 4 -Evergreen Solar, Inc. won approval on Monday for the disclosure statement associated with its Chapter 11 plan of liquidation.

All objections to the plan and disclosure statement filed on April 30 were resolved, debtors attorney Laura Davis Jones said during a hearing in the U.S. Bankruptcy Court for the District of Delaware.

A plan confirmation hearing is scheduled for July 13.

Liquidation plan

As previously reported, the plan outlines the treatment of creditors and the winding down of operations following the $8.53 million sale of Evergreen's closed manufacturing plant in Devens, Mass., to 112 Barnum Road, LLC.

The sale was predicated on a settlement between Evergreen and the Massachusetts Development Finance Agency that called for the agency to receive $5 million of the cash price.

Massachusetts Development owned the land, and Evergreen owned the building and equipment.

The plan also is based on a settlement between the debtor and its official committee of unsecured creditors, supporting noteholders and indenture trustee U.S. Bank NA.

On the plan effective date, "the plan administrator shall be deemed the sole director, officer and representative of the liquidating debtor to exercise the rights, power and authority of the liquidating debtor," according to court documents.

Treatment of creditors

Under the proposed plan, treatment of creditors includes:

• Holders of allowed administrative claims, priority tax claims and non-priority tax claims will be paid in full in cash;

• Holders of allowed non-noteholder secured claims, if any, will receive the net proceeds of the sale of their collateral;

• Holders of general unsecured claims - including all 4% convertible note claims and the 13% notes deficiency claim - will receive a share of the net proceeds of the sale of the debtor-retained, effective-date assets remaining after payment of administrative, priority and noteholder secured claims. The holders of the 13% notes deficiency claim will not be paid until after all others in the class have received an aggregate 1% recovery; and

• Holders of equity interests will receive no distribution.

Settlement terms

As previously reported, the terms of the agreement with the creditors committee, the supporting noteholders and U.S. Bank NA are:

• 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 a 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 the 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;

• 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, 2011 under Chapter 11 case number 11-12590.

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