Sungevity Inc. files for Chapter 11, will sell assets in restructuring

Written By: Stratton Report
March 13, 2017

On March 13, Sungevity, Inc. a residential and commercial solar energy developer, announced it had commenced voluntary Chapter 11 proceedings in U.S. Bankruptcy Court for the District of Delaware.

The firm noted it had taken the step to facilitate a financial and corporate restructuring, and the recapitalization of the company.

Sungevity expected that during the Chapter 11 proceedings, its operations will continue uninterrupted.

As part of Sungevity‚Äôs restructuring process, the firm announced that under Section 363 of the Bankruptcy Code, it had entered into an asset purchase agreement with a group of investors, led by Northern Pacific Group in which Northern Pacific Group will acquire substantially all of the company’s assets, including the equity interests in the European operations. Per Sungevity, Northern Pacific Group is a Wayzata, MN-based private equity firm.

According to the firm, the purchase agreement sets the floor, or minimum acceptable bid, for an auction under the supervision of the court, which is designed to achieve the highest available offer.

Sungevity hopes to complete its financial restructuring and sale through an expedited process, anticipating a final sale approval hearing and closing of the sale by the end of April.

According to the firm, the group of investors has committed to provide the company with up to $20 million in financing in order to provide for the company’s operations and to fund the auction and sale. The financing, subject to interim court approval, will be used to fund the company’s day-to-day operations, and pay any expenses related to the Chapter 11 proceedings.

William Nettles, Sungevity’s newly appointed Chief Administration Officer, observed:

The agreement we have reached with the team led by Northern Pacific Group and its co-investors is a testament to their confidence in the future of Sungevity’s business. The actions we have announced today will allow Sungevity to emerge as a stronger and more competitive company. With its market-leading software platform and its high quality employees who provide unwavering commitment to customers and exceptional service, Sungevity intends to be at the forefront of the industry as solar continues on its growth trajectory in the years ahead.

Andrew Birch, Sungevity’s Chief Executive Officer remarked: “The Board and its advisors reviewed a range of options and ultimately decided that a court-supervised sale represents the best path forward for our customers, suppliers, employees and business partners. During the sale process, our team will remain committed to serving our customers and delivering our industry leading service. Our ample on-hand inventory and uninterrupted installment contracts position us well to continue fulfilling our customers’ orders. Sungevity has long been a pioneer in the field of residential solar installation, and we believe that this represents a step forward for the company.”