Canadian Unit of SunEdison Files for Bankruptcy Protection

by San Antonio Attorney

SunEdison Inc., a well known renewable energy company, recently filed for bankruptcy for its Canadian branch in order to get more time to sell their assets and come up with a strategy to relieve themselves from debt.

The Canadian unit of SunEdison can no longer maintain operations as a developer of renewable energy projects.

The company’s Canadian unit, which also handles renewable energy ventures, claims it can no longer finance its business operations.  SunEdison filed for bankruptcy protection under the Canada’s Companies’ Creditors Arrangement Act.  This law is similar to the Chapter 11 bankruptcy in the United States.

Based in Ontario, SunEdison’s financial troubles stemmed from the liquidity issues relating to the bankruptcy filing of its parent company.

A request for a United States proceeding extension will be scheduled on November 17.  The exclusivity extension rule will give SunEdison more control over their plans for reorganization.

Terraform Power and Terraform Global are publicly held companies involved with SunEdison.  They contributed a huge part of finances that boosted SunEdison’s status as an energy company.

These two companies are at risk for financial collapse as they have not filed for bankruptcy protection.  Terraform Power and Terraform Global have filed claims that SunEdison’s total cost of damages cost around $3 billion.

In response, SunEdison has denied any allegation made by the two companies involved.  The energy company has initiated settlement talks, which also serves as a leverage to provide more time.

SunEdison filed for bankruptcy at the time it is being investigated by the Securities and Exchange Commission.  The investigation was conducted due to suspicious cash on hand and transactions conducted by TerraForm Global.

Judge Bernstein’s opinion of SunEdison’s fate as a company seems to be more inclined on the negative side.   Bernstein described SunEdison as something ‘hopelessly insolvent’ and is predicted to walk out on $1 billion worth of unsettled debts.

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