Tuesday, March 11, 2014

Suntech Power Holdings Co. Chapter 15 Petition Filed

An interesting discussion on of how Suntech Power Holdings Co.'s involuntary chapter 7 bankruptcy case in the U.S. was dismissed, and the company's liquidators' request for U.S. court recognition of Suntech's insolvency proceedings in the Cayman Islands.

February 21, 2014

Cayman Islands-based Suntech Power Holdings Co. filed for Chapter 15 protection with the U.S. Bankruptcy Court in the Southern District of New York, case number 14-10383. The holding company, whose operating subsidiaries develop, manufacture and deliver solar energy solutions, is represented by Jennifer Taylor of O’Melveny & Myers. The Company announced that its joint provisional liquidators, appointed by the Grand Court of the Cayman Islands to oversee its restructuring, commenced this proceeding for United States recognition of its overseas provisional liquidation. The Cayman Islands-based Courts previously granted this recognition. David Walker, one of the joint provisional liquidators, comments, "The Chapter 15 petition is a very important step to conclude a successful restructuring of the Company as it would allow a centralized process to assert and resolve claims against the Company, and to make distributions to the Company's creditors. Chapter 15 recognition will stay actions brought by creditors in the United States, and help ensure that all creditors are treated equally with similarly situated creditors in the Cayman Islands proceeding." This Chapter 15 filing was a provision of the restructuring support agreement (RSA) entered into with (among other parties) the petitioners for an October 14, 2013 involuntary Chapter 7 proceeding filed against Suntech Power Holdings. Documents filed with the Court explain, “Under the RSA, Suntech, the Petitioning Creditors and the Supporting Noteholders have agreed that a stipulation among the parties for the dismissal of the Chapter 7 Case will be executed and presented to the court following recognition of the Cayman Proceeding under chapter 15 of the Bankruptcy Code.” The Company’s Chapter 15 petition indicates total assets greater than $1 billion.

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