In their May 8 objection to the disclosure statement, the lawyers for the equity committee, Nastasi Partners, raised some key questions:
Part of the problem with getting a clearer picture of the various multiple layers of subsidiaries is that even the reorganization plan is not specific about what happens with specific intercompany claims. As stated in the proposed plan: "all net Allowed Intercompany Claims (taking into account any setoffs of Intercompany Claims) held by the Debtors between and among any Affiliate of the Debtors shall be either reinstated, cancelled, released, or otherwise settled in the Debtors' discretion with the reasonable consent of the Supporting Second Lien Parties".**Why did the Debtors (SunEdison)... decide to liquidate rather than reorganize?**How did the Debtors raise $24 billion between 2013 and 2016, but manage to dissipate approximately $20 billion?**How much are the Debtors' interests in their myriad direct and indirect subsidiaries worth - and what happened to the $9 billion the Debtors invested in them?**Were the Debtors' servicing contracts with the YieldCo modified around the time of the bankruptcy filings to provide for unilateral termination by the YieldCos on 30 days' notice - thereby stripping the estates of significant value?**How does the value ascribed to the Debtors' servicing business under the proposed YieldCo Settlement square with an enterprise value of $2.231 billion - the value SunEdison ascribed to that same business in January of 2016?
Many of the projects have financing that is specific to that project without guarantor of other SunEdison entities and are not part of the Chapter 11 filing. Additional entities, however, have been added over the last year to those included in the joint bankruptcy case. It is unclear on the value of these intercompany receivables and the allowance for doubtful accounts. This makes it nearly impossible to get a handle on valuation of each separate entity and a collective valuation.
Conclusion
After over a year in bankruptcy and over $100 million in bankruptcy fees, this case is still not finished. What happened to the $20 billion is a legitimate question. Given the enormity of the difference in the reported balance sheet for SunEdison and the very modest $84.2 cash recovery from liquidating assets, there needs to be more transparency, with a basic reconciliation statement included in the disclosure statement.
