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.
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