Wednesday, November 6, 2013

Why Suntech's Reorganization Needs Court Supervision $STP

A correspondent writes in detailing the conflicts of interest of Suntech's management.

  1. "Wuxi installed their man into the CEO and acting CFO job as soon as the company filed, and then proceeded to actively bid for the company’s assets in that BK with no recusals as far as we know – was the solicitation of bidders as robust as it should have been, did they hire an advisor, did Wuxi see the bids before they put theirs in?
  2. Wuxi has a controlling interest in P4 plant and from reports it appears that will be contributed to a restructured holdco in exchange for an equity position – who is opining on the fairness of that transaction, what has the process been at the board level, have the Wuxi installed execs recused themselves from that process, have the relative equity stakes in the P4 changed since the Wuxi installed CEO came on board?
  3. the creditors in Wuxi Suntech have been given the option of taking trade payables in SPI rather than cash from the Shunfeng asset purchase; did Wuxi negotiate those terms and how were they determined if they did, is Wuxi choosing to take the trade payables for whatever they are owed and if so isn’t there a blatant conflict with the current CEOs duty to maximize value for the credits and shareholders of the holdco,
  4. there are reports that Wuxi hopes to split off the GSF assets into a solar farm company that it would control – what influence has the Wuxi installed CEO had on the management of GSF now that the General Partner has been deposed, has that business been run in a fashion to maximize its value or to make it less costly for Wuxi to acquire it
  5. it has been widely reported that Wuxi plans to be make an equity investment in the holdco as part of a restructuring apparently as part of an agreement with the two distressed funds – are the terms of that transaction as favorable to the creditors as possible, is there a quid pro quo involved, when will that transaction be disclosed
  6. are they at all troubled by the appalling lack of disclosure to security holders of the company since the company stopped issuing financial statements generally and since the default of the bonds in particular.
Given all of the inherent conflicts in the manner in which the company is being managed, it seems almost beyond dispute that the resolution of the bondholders claims needs to transpire in bk court where the appropriate amount of sunlight can be brought to bear on all of these transactions."

1 comment:

Anonymous said...

Delisting rumor