SunEdison committee opposes payment of up to $8.5 million to adviser

By Caroline Salls

Pittsburgh, Feb. 28 – SunEdison, Inc.’s official committee of unsecured creditors objected to the company’s motion to grant a post-bankruptcy indemnification to tranche B lenders/steering committee financial adviser J.P. Morgan Securities LLC and to pay a related fee, according to a Tuesday filing with the U.S. Bankruptcy Court for the Southern District of New York.

The committee said JPMorgan stands to collect a fee of between $4 million and $8.5 million under the compensation and indemnification proposal, depending on how TerraForm Global, Inc. and TerraForm Power, Inc. are sold.

“Based on the information provided thus far, the compensation and indemnification proposed in the indemnification motion appear to promise J.P. Morgan Securities LLC payment for services that appear duplicative of other financial advisers in these bankruptcy cases, and also to guarantee it an even bigger payment in a scenario in which JPM would at most render services no more extensive than those anticipated in the active YieldCos sale process,” the committee said.

In addition, the creditor group said the proposed fee “appears unreasonable relative to JPM’s contemplated scope of work,” which the committee said is not authorized by the company’s debtor-in-possession credit agreement or by bankruptcy law.

“It is unclear what work JPM has performed or may perform to justify this fee – or why the debtors should reasonably obligate themselves to indemnify it,” the objection said.

“The lack of sufficient detail raises significant questions in light of the facts that JPM did not arrange, broker or underwrite the contemplated transaction; JPM does not represent either the buyer or the sellers in the transaction; and the YieldCos sales process had already been launched by other retained professionals before JPM even began providing its purported services.”

A hearing is scheduled for March 7.

Based in Maryland Heights, Mo., SunEdison operates renewable power plants. It filed for bankruptcy on April 21, 2016 under Chapter 11 case number 16-10992.

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