SunEdison confirmation adjournment sought in light of equity changes

By Caroline Salls

Pittsburgh, July 19 – CNH Partners, LLC and AQR Capital Management LLC requested adjournment of SunEdison, Inc.’s plan of reorganization confirmation hearing in light of the recent filing of a proposed amendment to the company’s equity commitment agreement (ECA), according to a motion filed with the U.S. Bankruptcy Court for the Southern District of New York.

CNH and AQR said the revised ECA removes the requirement that backstop purchasers prefund their obligations before the confirmation hearing and extends the deadline for them to do so by 16 weeks.

“Such an amendment to the ECA, and the timing of such amendment, demands an adjournment of the confirmation hearing to permit creditors, and the court, sufficient time to analyze whether the proposed plan remains feasible in light of the second revised ECA,” the motion said.

Although CNH and AQR said SunEdison is now arguing that an almost four-month delay of the funding obligations is reasonable because the backstop purchasers should not be forced to have their funds tied-up for such an extended period of time, they said the company previously told the court that “tying up the backstop purchasers’ funds is precisely the reason why they are entitled to a discounted purchase price.”

CNH and AQR said the company also argued that in return for delaying the funding obligations, the backstop purchasers have agreed to increase the minimum total equity commitment to $300 million from $285 million.

However, CNH and AQR said they are prepared to provide SunEdison with the additional $15 million of equity commitment upon the same terms and conditions as are set, which will allow the company to retain the benefit of receiving the prefunding commitments in escrow before the confirmation hearing.

“Moreover, by filing the second revised ECA at 11:30 p.m. ET on the Friday prior to the confirmation hearing and one-day after the deadline to object to the proposed plan, the debtors virtually guaranteed that no party could raise any issues and/or concerns with respect to the second revised ECA or its effect on the proposed plan’s feasibility,” the motion said.

The confirmation hearing is scheduled for July 20.

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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