Cohocton Wind Watch
Cohocton Wind Watch is a community citizen organization dedicated to preserve the public safety, property values, economic viability, environmental integrity and quality of life in Cohocton, NY and in surrounding townships. Neighbors committed to public service in order to achieve a reasonable vision for a Finger Lakes region worthy of future generations.


READ about the FIRST WIND Connection to the Obama Administration

Industrial Wind and the Wall Street Cap and Trade Fraud




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Thursday, February 02, 2017

SunEdison Shareholder Uncovers Billions Of Dollars In Taxpayer Money Hidden In Bankruptcy

Conclusion and Consequences

SunEdison has received billions of dollars in tax incentives, loans and loan guarantees from the U.S. government. The valuation of projects and subsidiaries has been critical when obtaining these loan. If Homer Parkhill's claim that there is almost no value to the assets in SunEdison is true, it must indicate that the money granted by the U.S. government has been misplaced or mishandled.

There are several factors that point to an Enron-type scenario, and it is a surprise that neither the U.S. Department of Justice nor the U.S. Securities and Exchange Commission have reacted to the situation. But at least the congressional investigations have indicated that some have started to wonder about what has happened and what is currently happening with the taxpayer money that SunEdison has already received.

It is in everyone's interest to get SunEdison's response to congress listed as a docket in this Chapter 11 case or as an SEC filling. In response to the collapse of Enron, Worldcom, and other corporations, the U.S. Congress passed the Sarbanes-Oxley Act of 2002. SunEdison has decided not to file the K-10 and Q-10 pre-petition, which is actually mandatory. Therefore, SunEdison has been successful in bypassing Sarbanes-Oxley regulation that should be a tool used to avoid a new Enron scandal.

Source

Sunday, January 15, 2017

Wind farms killing more bats than expected


Saturday, January 14, 2017

New York Liberals Refuse To Build Wind Turbines In Their Backyards

Cornell University has again delayed plans to build wind turbines, citing local concerns about health effects, noise and the proximity of homes.
Tompkins County residents fought the Black Oaks Wind Farm for the last 11 years. Ithaca is the county seat and home of the Ivy League school , which has ironically contracted to buy power from the proposed wind farm.
The wind farm is relatively small — only 16 megawatts — but it is still being opposed by many locals, despite 68 percent of the county’s residents voting for Democratic presidential nominee Hillary Clinton in the 2016 elections, according to The New York Times. Clinton promised to produce enough renewable energy to power every U.S. home, and wind would have been part of that plan.
“There’s far too much resistance across New York State, from the very same people who said ‘no shale gas [fracking] in my backyard’ are now saying no solar panels and no wind in my backyard,” Tony Ingraffea, a Cornell University researcher, said at a press conference. “You can’t have it both ways. Suck it up and be courageous.”
Read the entire article

Wednesday, December 14, 2016

SunEdison Shareholders Made Stunning Accusations In Court

Source link

In addition, a number of shareholders have inundated the court's inbox with letters and emails (60 as of this writing) in a mad attempt to reopen the case for an Equity Committee.
The letters from shareholders vary in purpose and quality, but among their requests are: calls to prosecute Paul Gaynor (former First Wind CEO), Larry Summers (Chief of National Economic Council), Rahm Emanual (former White House Chief of Staff), Steve Scharzman (CEO of Blackstone), and John Podesta (Lobbyist for Renewable Energy) of wide spread collusion, corruption, and fraud; as well as several pleas to reverse the Official Equity Committee denial.
What is clear is that starting in late 2014 there appears to be a change in strategy. Prior to this point (highlighted in green), the Terraforms' debt is increasing incrementally with their assets received from SunEdison, and the transaction is pretty clear in both the buyer and sellers' books. However, at the start of 2015 SunEdison's balance begins to turn exponentially worse. Their assets decrease substantially as they drop them down into the yieldcos but their debt does not keep pace. Instead, debt grows substantially while the Terraform Power and Terraform Global's debt remains relatively flat. This change becomes most pronounced late 2015/early 2016. Terraform Power's assets grew by $2.7 billion, while their debt only increased $800 million. The deltas are somewhat hidden in the consolidated reporting because the overall balance sheet looks healthy as shown below:
It would appear that SunEdison was dropping assets into their yieldcos while keeping all of the debt on its books. This is what is sparking the theories and accusations of fraud. Because this action, if true, makes the entire bankruptcy appear planned from the beginning to strip the debt from the assets.
Jordan Danelz s letter claims this was possible because SunEdison was buying whole entities (such as First Wind and attempted Vivint Solar (NYSE: VSLR) for high premiums, and then keeping the shell of the entity as a subsidiary (with all of the associated debt) while dropping the assets. This was something that I discovered as unusual several months ago. At the time, I noticed SunEdison's First Wind subsidiary was not creating any revenue, despite SunEdison paying close to $2 billion for it.
Conclusion
This is a critical juncture between the Secured and Unsecured Creditors. Both sides are fighting over which path is best for the estate. In the meantime, Judge Bernstein demanded that SunEdison address the recent shareholders' letters. Perhaps re-evaluating the need for an Equity Committee, he asked if SunEdison had indeed gotten "rich" during the bankruptcy process. As it stands, shareholders are without representation and they have made it clear that their voice will be heard through constant letters to the court.

Wednesday, December 07, 2016

TerraForm Power, Inc. (TERP) - FORM 8-K - Dec 7 2016

http://seekingalpha.com/filing/3316531?uprof=46

Item 2.02 Results of Operations and Financial Condition.

On December 6, 2016, TerraForm Power, Inc. (“TerraForm Power”) issued a press release announcing the reporting of its financial results, and the filing of its Form 10-Q, for the fiscal quarter ended March 31, 2016. The press release also reported certain financial and operating metrics of TerraForm Power as of or for the fiscal quarter ended March 31, 2016 and 2015. A copy of the press release is furnished with this Current Report on Form 8-K as Exhibit 99.1.

In the attached press release, TerraForm Power discloses items not prepared in accordance with accounting principles generally accepted in the United States (“GAAP”), or non-GAAP financial measures (as defined in Regulation G promulgated by the U.S. Securities and Exchange Commission). A reconciliation of these non-GAAP financial measures to the most directly comparable GAAP financial measures is contained in the attached press release.

The information in this Current Report on Form 8-K (including the exhibit attached hereto) shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that Section. The information in this Current Report on Form 8-K (including the exhibit attached hereto) shall not be incorporated by reference into any filing or other document under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing or document.

Cautionary Note Regarding Forward-Looking Statements . Except for historical information contained in this Form 8-K and the press release attached as an exhibit hereto, this Form 8-K and the press release contain forward-looking statements which involve certain risks and uncertainties that could cause actual results to differ materially from those expressed or implied by these statements. Please refer to the cautionary note in the press release regarding these forward-looking statements.

Tuesday, December 06, 2016

TerraForm Power, Inc. (TERP)FORM 10-Q | Quarterly Report December 6, 2016

http://seekingalpha.com/filing/3315009?uprof=46

Claim relating to First Wind Acquisition

On May 27, 2016, D.E. Shaw Composite Holdings, L.L.C. and Madison Dearborn Capital Partners IV, L.P., as the representatives of the sellers (the “First Wind Sellers”) filed an amended complaint for declaratory judgment against the Company and Terra LLC in the Supreme Court of the State of New York alleging breach of contract with respect to the Purchase and Sale Agreement, dated as of November 17, 2014 (the “FW Purchase Agreement”) between, among others, SunEdison, the Company and Terra LLC and the First Wind Sellers. The amended complaint alleges that Terra LLC and SunEdison became jointly obligated to make $231.0 million in earn-out payments in respect of certain development assets SunEdison acquired from the First Wind Sellers under the FW Purchase Agreement, when those payments were purportedly accelerated by SunEdison's bankruptcy and by the resignations of two SunEdison employees. The amended complaint further alleges that the Company, as guarantor of certain Terra LLC obligations under the FW Purchase Agreement, is liable for this sum. Defendants filed a motion to dismiss the amended complaint on July 5, 2016, on the ground that, among other things, SunEdison is a necessary party to this action. Plaintiffs filed an opposition to the motion to dismiss on August 22, 2016. Defendants filed their reply on September 12, 2016. A hearing on the motion to dismiss is currently scheduled to take place on January 24, 2017.

Monday, December 05, 2016

Terraform Power reports $208M net loss for 2015

http://seekingalpha.com/news/3228666-terraform-power-reports-208m-net-loss-2015?uprof=46&dr=1#email_link

TerraForm Power (TERP +1.9%) reported a $208M net loss for 2015 in its first financial report in more than a year, with a loss attributed to common shareholders of $80M, or $1.25/share, as it seeks to break away from bankrupt parent SunEdison.
TERP said in its 10-K filing that it has had trouble accessing debt and equity markets since SunEdison filed for bankruptcy in April, and that it still relies on SunEdison for operational, systems and staffing support, among other things; TERP said the bankruptcy also led to the loss of $11.3M in cancellations for residential solar projects.
TERP said it "has a well-defined process and timeline and has asked bidders to provide firm pricing by a defined date in early January 2017, with binding bids due shortly thereafter."

TerraForm Power, Inc. - Selected Financial Data

http://www.batr.org/ecoenergy/id11.html

Our consolidated financial statements were prepared assuming we would continue as a going concern (which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business). Our ability to continue as a going concern is dependent on many factors, including among other things, the resolution of the SunEdison Bankruptcy absent claims from interested parties that the assets and liabilities of the Company be substantively consolidated with SunEdison and that the Company and/or its assets and liabilities be included in the SunEdison Bankruptcy as well as our ability to comply with or modify our existing debt covenant requirements. Management’s plans with respect to these conditions are further described in Note 1 to our consolidated financial statements included in this annual report on Form 10-K. The following Selected Financial Data taken from our accompanying financial statements have been prepared assuming that we will continue as a going concern. These financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Read the entire statement on the above link

TerraForm Power, Inc. (TERP)FORM 10-K | Annual Report

http://seekingalpha.com/filing/3313399?uprof=46&utoken=5a73019890f4b8b60a9892f2ee461e92eb22beb6

Management’s Report on Internal Control over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934. Our internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. generally accepted accounting principles and includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company’s assets that could have a material effect on the financial statements.

As of December 31, 2015 , management conducted an assessment of the effectiveness of our internal control over financial reporting based upon the framework issued by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control-Integrated Framework (2013) (COSO 2013 Framework). Based on management’s assessment using these criteria, our management concluded that, as of December 31, 2015 , our internal control over financial reporting was not effective as further described below.

A material weakness is a deficiency or a combination of deficiencies in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement in our annual or interim financial statements will not be prevented or detected on a timely basis. As of December 31, 2015 , we identified the following material weaknesses:

The Company, and SunEdison as our service provider for all matters related to financial reporting processes and controls, did not maintain an effective control environment, risk assessment process, information and communication process and monitoring activities based on the following:


The Company did not have effective Board oversight and management monitoring activities over the information technology system development and implementation of financial reporting processes and internal controls established by the parent company service provider;

The Company did not have a sufficient number of trained resources with assigned responsibility and accountability for financial reporting processes and the design and effective operation of internal controls conducted by the parent company service provider;

The Company did not have an effective risk assessment process that identified and assessed necessary changes in generally accepted accounting principles, financial reporting processes and internal controls, in response to risks of fraud and error impacted by changes in the business model resulting from rapid growth from acquisitions, changes in information systems, changes at SunEdison, and transition of key personnel;

The Company did not have effective information and communication processes that ensured appropriate and accurate information was available to financial reporting personnel on a timely basis in order that they could fulfill their roles and responsibilities; and

The Company did not have effective monitoring activities in place to assess whether the components of internal control were present and functioning.

Accordingly, the Company, and SunEdison as our service provider for all matters related to financial reporting processes and controls, did not have effective control activities over the following:


The Company did not have effective general information technology controls (GITCs), specifically, system development, program change, and access GITCs over the consolidation and Solar segment operating systems, databases, and IT applications. Also, the Company did not have effective access controls over the Wind Segment operating system,

databases, and IT applications. Accordingly, process level automated controls and compensating manual controls that were dependent upon the information derived from IT systems were also deemed ineffective.

The Company did not have effective controls over the completeness, existence, and accuracy of revenues, specifically, process level controls over the price and quantity inputs to revenue and accounts receivable transactions were not adequately designed and performed.

The Company did not have effective operation of reconciliation controls over the completeness, existence and accuracy of various balance sheet accounts. Specifically, the reconciliation controls did not adequately investigate, resolve and correct reconciling items on a timely basis.

The Company did not have effective controls over the completeness, existence and accuracy of allocated general and administrative expenses including payroll and other costs shared with SunEdison.

The Company did not have effective controls over the completeness, existence and accuracy of the transfer of historical costs related to renewable energy facilities acquired from SunEdison.

The Company did not have effective controls over the completeness and presentation of restricted cash. Specifically, the Company’s policies and procedures to record restricted cash were not applied consistently across accounts.

The Company did not have effective controls over the completeness and accuracy of information used in goodwill impairment, business combinations, hypothetical liquidation of book value, debt covenant compliance and going concern processes.

These control deficiencies resulted in several material misstatements to the preliminary consolidated financial statements that were corrected prior to the issuance of the audited consolidated financial statements. These control deficiencies create a reasonable possibility that a material misstatement to the consolidated financial statements will not be prevented or detected on a timely basis, and therefore we concluded that the deficiencies represent material weaknesses in the Company’s internal control over financial reporting and our internal control over financial reporting was not effective as of December 31, 2015.

Monday, April 25, 2016

WHILE THE PARIS CLIMATE DEAL WAS BEING SIGNED. THE LARGEST RENEWABLE BANKRUPTCY OCCURRED.

SunEdison Bankruptcy for Dummbies. Share this video with the ill-informed.

Thursday, April 21, 2016

SunEdison Won't Go Bankrupt... And David Einhorn Might Have Proved My Point

Summary

Citing Rule 10b5-1 and 10b5-2, Einhorn and Greenlight would be prohibited to sell with knowledge of material, non-disclosed information.
SunEdison in late-stage negotiations to sell 450-MW to Hinduja Group.
The near-term cash flow is the driver to get a deal done and emerge strategically forward.
Although battered, I am not yet convinced that a SunEdison (NYSE:SUNE) bankruptcy is in the near-term future for shareholders. In my last article, I proposed that the company would embark on a plan to sell some assets, change management and emerge badly bruised, but not dead. This week, nothing has changed that would cause me to change my thesis.
In fact, a couple of new reports and reliable deal speculation has worked to bolster my case and has provided the first step in the right direction.
First, it's now widely reported that a "company" is in direct talks with Hinduja Group, a company based in India, to sell a 450-MW power plant. The "company" in question is U.S.-based - however, no actual name was provided. But The Hindu Business Line, which published an exclusive to the story, directed investors to the likelihood that SunEdison would be the seller of the assets. If this is indeed the case, it sets in motion the plan I outlined earlier - that with just a little bit of wiggle room, SunEdison could get enough footing to gain the traction necessary to see itself through the second half of 2016, which is the period that management has projected to realize a dramatic increase in cash flow, the kind of cash flow necessary and able to start the turnaround story. The company just needs to get there.
As was pointed out in a prior Seeking Alpha article, the projections offered by company management on April 3rd and April 11th call for 2H2016 free cash flow of over $800 million - a projection based on the completion of three solar projects, which are between 57% and 93% complete, according to a SunEdison filing. Now, whether or not investors can hold value to what management tells investors is a choice made, and to each his own, but I believe management is telling investors quite clearly that if an immediate cash injection is received to clear this current challenge, the company can emerge quickly and regain its strong position as a leader in the solar world.
I am not suggesting an immediate growth plan for SunEdison, at least not yet. But utilizing the yieldco concept does have its merit, if managed properly. What happened to the company is a result of the easy money Wall Street bubbles that seem to emerge every other year or so. With a bond market that has been offering historically low interest rates, investors had to once again look to creative ways of producing a return on investment, with a decent level of security and an expectation of a regular and predictable dividend. And institutional funds certainly flocked to the yieldco model offered by SunEdison. In fact, for the filing period ending on 12/31/16, there were 453 institutional holders representing over 266 million shares. Except for the Greenlight sale reported on 4/17/16, we have no way of knowing who is still holding positions into the end of the second quarter.
It remains part of my contention that the market forces will intervene and not allow billions of dollars of investment losses to be realized. Keep in mind that when we say institutional funds, we are talking about vehicles of investment for retail holders as well as for other institutional funds. Remembering the Madoff days, "funds of funds" were investing into his scheme. But SunEdison is not a scheme, and for a relatively small amount of cash, the company can emerge and generate meaningful cash flows within sixty days of future operations, based on its own model. Investors just want a deal that keeps the company alive and allows investors the long-term prospects of realizing healthy gains in the future. Dilution is not a factor.
I understand the argument that the Greenlight share sale was the final message to the market that SunEdison is headed for a bankruptcy filing. However, I see it quite differently, and it's a second reason that supports my thesis that the company is not planning an imminent bankruptcy filing.
Because Greenlight has a sitting Board member in SunEdison, namely Claire Gogel, they would be bound by the material information clause incorporated into SEC Rule 10b5-1 and 10b5-2. The definition is clear, and I don't see where there is room for Einhorn to trade around a near-term or imminent bankruptcy filing. In my opinion, it would clearly violate the Rule.
Rule 10b5-1 states that:
Rule 10b5-1 provides that a person trades on the basis of material nonpublic information if a trader is "aware" of the material nonpublic information when making the purchase or sale. The rule also sets forth several affirmative defenses or exceptions to liability. The rule permits persons to trade in certain specified circumstances where it is clear that the information they are aware of is not a factor in the decision to trade, such as pursuant to a pre-existing plan, contract, or instruction that was made in good faith.
Rule 10b5-2 states that:
Rule 10b5-2 clarifies how the misappropriation theory applies to certain non-business relationships. This rule provides that a person receiving confidential information under circumstances specified in the rule would owe a duty of trust or confidence and thus could be liable under the misappropriation theory.
I further checked to make sure that a filing of a Form 4 or 13d was a defense to trading on material, non-public information, and I was unable to find a plausible defense that would allow such a trade to happen. It would be entirely unreasonable to believe that Einhorn would not have knowledge of a decision made by the Board and management to proceed towards a bankruptcy filing. In fact, with as many leashes that Greenlight put around SUNE management's neck, the idea that Einhorn would not have knowledge to a pending material event would be a stretch of conventional reality.
The trading action on the stock also indicates that investors are undecided as to what will happen with SunEdison. After the initial sell-off attributed to Einhorn cutting his stake, the shares rebounded sharply on Wednesday, trading higher by 28% before a modest pullback into the close. In my opinion, other investors could be theorizing that if Einhorn sold shares, a bankruptcy filing might not be a decided reality.
I have spent considerable time trying to find an "out" for his decision to sell, and with my assumption that he would have knowledge of boardroom activity, I can't find one. The rule is clear and there are no exceptions. Certain regulatory filings are required, and he made them. But that does not release him from stringent regulations regarding buying or selling shares while in possession of material and non-publicly disseminated information.
For these reasons, my thesis remains. SunEdison is too big to fail on many levels. From the "messy" court proceedings to the billions in losses to private and public equity funds, the damage would be too far-reaching to not have a lifeline thrown the company's way. Further, the recent trading activity does not indicate an imminent bankruptcy. Yes, the stock is beaten down to .34 cents; however, millions of shares are still changing hands on a daily basis, leading me to believe that I am far from being alone with my prophetic thoughts of glory days ahead.
Love SUNE or hate SUNE, it's a 50/50 debate at this point in time. But one thing is for sure. Regardless of the pounding on the table by some media outlets about the company's future, no one outside of the Board room knows for sure what SunEdison plans to do in the immediate future.
In my opinion, SUNE management views the second half of the year as its entry into the promised land and will do everything possible, including asset sales, to deliver the company to serenity. And it can't happen fast enough - we all need some "serenity now".

Wednesday, April 20, 2016

Pelosi’s Husband Invested in Solar Firm Weeks Before Lucrative Expansion

SunEdison is now eyeing bankruptcy, but Paul Pelosi invested right before a 2014 stock rally

House Democratic Leader Nancy Pelosi’s husband bought up to a quarter million dollars of stock in a now financially troubled green energy company just weeks before it announced a major 2014 acquisition that sent stock prices soaring, public records show.
SunEdison told regulators last week that it is eyeing bankruptcy under the weight of $11.7 million in debt. But in late 2014, investors were bullish on the company, which manufactures and operates solar and wind power facilities.
Its 2014 purchase of wind energy company First Wind “further bolstered the reputation of the company,” wrote one market-watcher at the time. “Perhaps unsurprisingly, SunEdison’s stock soared an astounding 29% on news of this acquisition alone.”
Pelosi’s husband, Paul Pelosi, had invested just in time. He bought between $100,000 and $250,000 in SunEdison stock on Oct. 24, 2014, according to congressional financial disclosures. The company announced its First Wind acquisition on Nov. 17.
Pelosi’s office did not respond to questions about the timing of the purchase and whether she or her husband had any advance knowledge of the deal.
Pelosi has previously been accused of trading stock based on information gleaned through her official duties. She participated in Visa’s initial public offering as the company fought a House bill to subject credit card companies to increased regulation. The measure failed to pass.
A law passed in the wake of that controversy prohibits members of Congress from using nonpublic information for personal gain. Language in that measure was informally dubbed the “Pelosi Provision.”
In addition to her stock trades, Pelosi steered more than $1 billion in federal subsidies to a light rail project that likely improved the value of the San Francisco headquarters of cloud computing company Salesforce, in which her husband had invested up to $1 million.
Paul Pelosi’s stake in SunEdison will likely force the wealthy investor to take a haircut if the company declares bankruptcy. SunEdison’s First Wind acquisition turned out to be a significant part of a larger expansion over the last two years that left the company with unsustainable levels of debt.
On the heels of its First Wind deal, in July 2015, SunEdison announced that it would buy residential power company Vivint Solar for $2.2 billion. Its stock improved on the news, and then began its precipitous decline.
The Vivint deal fell apart in March. The company accused SunEdison of breach of contract, and SunEdison announced that it had been subpoenaed by the Department of Justice over the failed acquisition.
SunEdison has maintained strong a strong presence in Washington throughout its financial woes. The company has spent more than $1 million on its lobbying operation since 2011.
It has employed lobbyists with the powerhouse Podesta Group since 2012, disclosure forms show. In 2015, it brought on 38 North Solutions, a green energy focused lobbying firm. Both firms lobbied to preserve federal tax credits for renewable energy generation.
Pelosi fought for the extension of those tax subsidies in a major congressional deal late last year.
The Podesta Group is run by a top Hillary Clinton fundraiser. Its cofounder chairs her presidential campaign, to which SunEdison donated last year. The company has also donated to the Bill, Hillary, and Chelsea Clinton Foundation.
The son of Ira Magaziner, the chief executive of the foundation’s health policy arm, served as a “clean energy associate” at the foundation before taking a project finance position at SunEdison last year.

Monday, April 18, 2016

SunEdison's Complex Finances Make Potential Bankruptcy `Messy'

SunEdison Inc.’s potential bankruptcy would be the biggest ever in the renewable-energy industry, and the largest U.S. failure in more than a year. It also promises to be more complicated than most.

The world’s biggest clean-energy developer had total debt of $11.7 billion as of Sept. 30, the last comprehensive figure it reported, after a two-yearbuying binge of wind and solar assets on six continents. The company is preparing to file in New York, according to a person familiar with the matter.
If it does seek protection from creditors, the proceedings may drag in SunEdison’s two publicly traded holding company units, TerraForm Power Inc. and TerraForm Global Inc. A SunEdison bankruptcy also has the potential to trigger defaults on multiple wind and solar farms that are generating revenue from selling electricity.
SunEdison’s global expansion effort was fueled by a complex web of financing that includes loans from banks and hedge funds, credit lines and the initial public offerings of the TerraForm units. It has seven outstanding convertible bonds, according to data compiled by Bloomberg.
“It’s going to add much more complexity than normal,” said Brandon Barnes, a senior analyst at Bloomberg Intelligence, in Washington. “You’re dealing with affiliates that may not want to be associated with the parent company.”

Creditor Talks

The company acknowledged in a regulatory filing April 15 that it’s talking with creditors about financing to carry the company through bankruptcy reorganization. Ben Harborne, a SunEdison spokesman, declined to comment for this story.
Potential creditors may also include insurance companies, at least one university and the residential solar installer that SunEdison tried to buy for $1.9 billion, Vivint Solar Inc., which sued for damages after the deal fell apart in March. TerraForm Global is pursuing another suit, alleging that SunEdison misused the holding company’s cash.
Two SunEdison creditors, New York-based hedge fund D.E. Shaw & Co. and Madison Dearborn Capital Partners IV LP, filed a separate lawsuit this month, seeking $231 million from TerraForm Power because SunEdison allegedly has missed some deferred payments as part of a $1.9 billion acquisition in January 2015. 

TerraForm Shares

“These developments reiterate our concerns that there is a small, but non-zero, probability that the TerraForm entities might be substantively consolidated into a SunEdison bankruptcy,” said Swami Venkataraman, a Moody’s Investors Service analyst in New York.
“The creditors of SunEdison are going to be in control,” he said. “If that means monetizing the TerraForms’ Class B shares by selling them, so be it. If that means dragging the TerraForms into bankruptcy, so be it.” SunEdison controls the TerraForm units through ownership of Class B shares.

‘Messy’ Process

The companies’ finances will make a potential bankruptcy a challenge, said Greg Jones, an analyst with CreditSights Inc., a New York-based research company.
“It can potentially be more messy,” he said. “It’ll get really complex and complicated real fast.”
SunEdison’s financial structure is so opaque that its own employees have raised questions, and the company is being investigated by the U.S. Department of Justice and the U.S. Securities and Exchange Commission.
The TerraForm units have attempted to distance themselves from their parent.
“TerraForm Power and TerraForm Global do not rely substantially on SunEdison for funding or liquidity and believe that, in the event SunEdison seeks bankruptcy protection, the companies will have sufficient liquidity to support their respective ongoing operations,” said Joseph Sala, a spokesman for both companies.

Energy Future

Some of the SunEdison complications are similar to two recent blockbuster bankruptcies, Energy Future Holdings Corp. and Caesars Entertainment Operating Co. In those cases, conflicts arose over which investors were in control of the process and the appropriate role of parent companies and subsidiaries during reorganization. 
Energy Future filed for Chapter 11 in April 2014 listing almost $50 billion in liabilities and spent months devising a plan to split its money-making electricity-distribution arm and unprofitable power generation business in a way acceptable to creditors and the court. Some Caesars creditors are still disputing actions that the parent Caesars Entertainment Corp. took before the operating unit’s $20 billion bankruptcy filing in January 2015.
In the case of the SunEdison-TerraForm ecosystem, the operating power plants are typically their own legal entities with stable, long-term deals to sell power. Some of those contracts have clauses that trigger different types of defaults if SunEdison files for bankruptcy.
“The solar and wind assets are great assets,” said CreditSights’s Jones. “They’re mostly contracted with investment-grade utilities. It’s just the financial situation of SunEdison that got in the way.”

SunEdison planned to go bankrupt as soon as TerraForm Power went public.

When SunEdison began splitting itself up into multiple public companies in what could be one of the most ingenious strategies the business world may have ever seen, if they can get away with it. SUNE builds and/or constructs projects and after a period of time, drops them down into a subsidiary, whether it be TERP or GLBL, who retain call rights on all of the projects anyway.

SunEdison has been forever unwavering on their plans to take over Vivint Solar. It should also be noted that SUNE is the company issuing bonds to VSLR shareholders and not TERP. It should also be pointed out that the filings for the deal actually requires VSLR to pay SUNE a breakup fee, when normally the acquirer would be the one to pay any termination fees. SUNE could walk away from the VSLR deal right now with a profit, but they don’t want to even though it caused their equity to get entirely demolished. Suspicious?

If SUNE can stay alive long enough to finish their deal financing with Invenergy and VSLR, I believe it will fold very shortly after in 2016. If TERP acquires these assets, they will become a growing cash generating machine for the next 15–20 years with not NEARLY as much debt as SUNE has.

After opining on the company’s debt structure, I have come to the conclusion that SunEdison’s pure mission was to raid the debt and capital markets in order to create the strongest renewable energy utility possible as quickly as the market would allow. That time has seemingly run out.

After the Invenergy and VSLR deals close, why wouldn’t SUNE close their doors and file for bankruptcy? I’m no legal expert, but presumably TERP and GLBL will be able to immediately acquire all future drop-down assets from SUNE with no strings attached. Finally, a “new company”, or SunEdison 2.0, could rise from the ashes debt-free and begin collecting massive amounts of cash distributions from the TerraForm sisters. Not to mention this company isn’t exactly as transparent as investors would like with their “private warehouse” subsidiaries that are also generating “X” amount of cash flow in secrecy. If a “SunEdison 2” comes out and begins receiving payments from TERP and GLBL, it would be simply brilliant. SUNE CEO Ahmad Chatilla will most likely be seen as a hero of the green energy revolution if this plays out for rapidly expanding growth of the industry at the expense of the financing system. Maybe he wants to become the Jesus Christ of clean energy and die for the sins of fossil fuel? No clue.

I have no idea if SunEdison can get away with this strategy, but I do believe they obviously have the management capability to take an operation with this strategy this far into the game. I wouldn’t be surprised if this works out in their favor. They, like Valeant, have simply taken advantage of the system provided to them. However, unlike Valeant, SUNE’s management put together a clear exit strategy.

I want to make this clear before I break into another section: I am not a short. It is actually against my investing philosophy to short. That being said, this is obviously a short/bear thesis on SUNE. Like Valeant, I’m advising investors stay away from SUNE as the story has just become too hard and it has no longer become an investment, but a gamble.

What do we do with the now-public daughter companies? Well, the market hates them, that’s for sure. TERP has traded nearly hand-in-hand with SUNE to the downside. Here’s some more disclosure: I am long TERP and continue to be bullish on the name. I don’t want to go into a full-out research piece on the company, but the fact that the companies trade together should be taken advantage of.

As mentioned earlier, if the parent dies, TERP will be in even better shape than before. This appears to me to be the driving reasoning behind SUNE’s bankruptcy strategy. Assuming it acquires SUNE’s completed projects for free all at once, it will have more assets, stronger cash flow, bigger distribution, and no payments to make to SUNE unless it comes back after bankruptcy. Reasonable debt levels with an enhanced ability to pay it off in a SunEdison-ridden world. Interestingly enough, drop-downs from SUNE are becoming less relevant and during their previous quarter it was mentioned less would be dropped down due to lack of market appreciation. As it stands right now, without SUNE, TERP can continue to pay its distribution and pay down debt in a relatively short timeframe (3–5 years is my modest estimation). TERP has sufficient cash flow for the next 10 years at minimum, using their own data from this quarter’s presentation. It is becoming more apparent that SUNE is becoming the leech to TERP, rather than a formerly balanced relationship. TERP reported separately from SUNE this quarter, and the tone and reaction showed that TERP is a very strong renewable utility. Honestly, a larger utility might make a mistake in not snatching it up after SunEdison goes bankrupt, as I assume it will.

I think that about wraps it up. SunEdison is one of my conviction avoid stocks. I’m not saying to short it, I’m saying it is too hard to own. If I’m wrong, oh well. I don’t think I’m wrong, though. TerraForm Power continues to be my solar holding of choice, after the rapid expansion under debt primarily held by SUNE. I believe the market will realize this eventually and see the opportunity TERP provides as a standalone company.

To the SunEdison management: Bravo.

-CaeX, 11/11/2015

Source

The Predetermined Death of SunEdison

I will keep the necessary introduction to the company’s activities relatively as short and sweet as possible, but it is hard. This report is mainly meant to help retail investors understand the full story and grave nature of the situation for SunEdison shareholders.

SunEdison ($SUNE) is a company that installs solar panels, and they do it in very high volumes globally. SunEdison, the company, is one of the leading forces driving the implementation of solar panels across the globe. SunEdison, the stock, is exactly the opposite.

SUNE went from all-time highs to multi-year lows in a few months time, bringing the entire solar sector along with it. The company also has public former-subsidiary companies, which is where the story truly becomes interesting.

TerraForm Power ($TERP) is SUNE’s primarily domestic-focused “yield co.” utility, and a second yield co., TerraForm Global ($GLBL), serves the same function but for emerging market assets. These companies are a key part of my thesis, so let’s keep them in mind.

SunEdison was a key participant of inflating (what I believe we will look back upon in the future) the solar bubble [along with companies like SolarCity ($SCTY)], and ultimately was the needle that popped it. I’m a believer that the industry (and stock prices of most companies) will recover in the distant future, so don’t count renewables out. It’s just been a very long time since the market has had many participants try and build a new industry, and I believe investors became over-exuberated.

This is an industry full of smart CFOs and financial engineering. But, SUNE has been the worst offender. SUNE was seen as a “roll-up”; buying tons of decent assets and companies while raising over $11 billion (yes, billion) in debt. This was somehow overlooked, and as the market cap would increase, so would the debt. Every new deal, every new debt raise, the stock went up to almost mirror the financing. Then, SUNE made “one deal too far” and made a deal with Vivint Solar ($VSLR) to buy the company for less than the VSLR IPO price, and that set off a red flag for investors. And, as the stock continued to fall from the peak the day of that announcement, debt still increased as SUNE continued operations.

So now, here we are just a few months later and the company is worth around $1.5B with still no real dent into the debt payments. Along with the rapid decline in stock price, the yield co.’s stock prices have been nearly equally as damaged.

History lesson over.

Now it is time to focus on the daughter company TerraForm Power. Both TERP and SUNE reported their quarters, 11/9/15 and 11/10/15, respectively, and provided details regarding future deals and projects; normal company-type things. The key takeaway from these conference calls & presentations was actually from the TERP call, where it was mentioned that two deals still have to close by the end of 1H16: The purchase of private company Invenergy’s wind power assets, and also the acquisition of Vivint Solar.

These two acquisitions are key in turning Terraform Power into an even more diverse renewable utility with the addition of more wind turbines and then residential solar. To be clear, in order to be a successful & sustainable business, these assets are not necessary for TerraForm Power. What they do, however, is rapidly grow the distribution paid to Daddy, SunEdison. Currently, SUNE is receiving distributions from TERP, and GLBL will follow [in a time period I don’t recall but don’t care to look up because it won’t matter anyway. It’s in the GLBL IPO filing if you really must know.].

What’s my point? How about I take some time to put all of the pieces together in what I believe to be the correct order. This is a very well-organized game of chess.

My thesis:

Source

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TEN Reasons
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First Wind Holdings Inc. 12/22/09 SEC S1/A IPO Filing

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