Sungevity committee: Sale process benefits only stalking horse bidder

By Caroline Salls

Pittsburgh, March 28 – Sungevity, Inc.’s official committee of unsecured creditors objected to the bid procedures for the proposed sale of the company’s assets, arguing that the sale process “creates a scenario by which these cases are being run solely for the benefit of the stalking horse/DIP lender,” according to a Tuesday filing with the U.S. Bankruptcy Court for the District of Delaware.

The committee said the proposed sale process calls for all of the assets of the Sungevity estates, whether previously unencumbered or encumbered, to be sold to the stalking horse bidder on an expedited basis.

As a result, the creditor group said the company will have insufficient funds to pay administrative expenses in full, “leaving nothing or virtually nothing for general unsecured creditors.”

In addition, the committee said the proposed sale timeline leaves it no time to object to the proposed debtor-in-possession financing or to investigate the validity of pre-bankruptcy liens and claims.

According to the motion, the bid procedures grant advantages to the stalking horse bidder that would require any interested third party to complete due diligence and submit a competing bid in less than two weeks.

“These built-in advantages will most assuredly chill (or preclude entirely) bidding and discourage the participation of potential buyers who may seek an opportunity to return the company to prosperity,” the committee said.

A hearing on the bid procedures motion is scheduled for March 29.

Based in Oakland, Calif., Sungevity is a technology-driven solar energy company, which enables users to get a quote without a site visit. It services 13 U.S. states as well as the Netherlands, Germany and the United Kingdom. The company filed bankruptcy on March 13 under Chapter 11 case number 17-10561.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.