Sunnova Faces Dealers Push-Back After ‘Whac-A-Mole' Bankruptcy
An ad-hoc group of dealers filed an objection on Monday in which it said a proposed asset sale of solar systems would strip away their claims and that the company has not had any discussions with traders about the terms of the sale, according to court documents. That $15 million sale, according to Sunnova, would fund the bankruptcy case.
Sunnova, one of the largest US rooftop solar companies, doesn't have a debtor-in-possession financing secured yet and only has $13.5 million cash on hand. It owes nearly $9 billion in funded debt. The company is working on asset sales in 'bite-size pieces' to press ahead its bankruptcy plan, according to company counsel Brian Schartz at the first-day hearing on Monday in Texas.
'We just ran out of time. We are playing a Whac-a-Mole,' Schartz said. Some companies enter bankruptcy with a restructuring support agreement and a clear path forward, but 'this is not that type of case,' he said.
The company is negotiating a potential debtor-in-possession financing with a group of investors represented by Paul, Weiss, Rifkind, Wharton & Garrison, Schartz said.
James Muenker, a lawyer representing large dealer Power Solar LLC, raised questions during the hearing over funds related to a Puerto Rico program. The dealer's lawyer asked whether the company is in possession of funding and grants from the US Department of Energy related to the program, and whether the funds will be used to pay for vendors' claims.
'There's no debt financing currently, and we don't know where the case exactly is going to go,' Muenker said.
Last month, Sunnova said it had struck an agreement with the Energy Department to reduce a $3 billion partial loan guarantee to $372 million.
The case is Sunnova Energy International Inc., case number 25-90160, in US Bankruptcy Court of Southern District of Texas.
--With assistance from Mark Chediak.
More stories like this are available on bloomberg.com
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