Monday, December 16, 2013

Comment Left On Suntech Post

This was posted in the comments section. Meant to post earlier.

News from a person who was present at the hearing this morning:

1. The petitioners will respond to the STPFQ motion to dismiss by or on 12/20.

2. A hearing on the STPFQ motion to dismiss was scheduled for 10am on 1/6.

The judge was skeptical about STPFQ's 3001(a) argument that Longball Holdings LLC does not qualify as a petitioner; his exact words were: "if the judgement ruling was held by the Dugaws instead of an entity which they own, would you still make the same argument? What difference does it make?"

The next hearing will focus on the STPFQ 305(a)(1) argument.

Clearwater + Spinnaker expressed concern that the NY chapter 7 proceedings would ultimately realize less value than the Caymen proceedings.

The petitioners expressed concern about the failure of restructuring efforts to yield a return and the ongoing dissipation of STPFQ assets.

Accordingly, the petitioners would like the chapter 7 proceedings to move forward or for STPFQ to voluntarily enter bankruptcy in NY asap.

On the other hand, Clearwater + Spinnaker would like to avoid the costs and filing requirements of converting the chapter 7 proceedings to chapter 15 in NY via 305(2)(b)(2).

Petitioners and Clearwater + Spinnaker are negotiating how to proceed now.

24 comments:

Anonymous said...

So the company has until 1/6 to file for Chapter 11 or 15?
If they don't file by then they risk being put into chapter 7 or can the file for bk protection after 1/6?

The saga continues..

Anonymous said...

A lot of activity in the bonds this week.

"1. The petitioners will respond to the STPFQ motion to dismiss by or on 12/20."

Will this be made public?

Anonymous said...

New dates:

Trondheim 1/7
Suntech 1/17
Hearing 1/23

Anonymous said...

"Shunfeng Photovoltaic has announced that one of its largest shareholders has paid the RMB2.5 billion (US$412 million) balance for Suntech’s manufacturing arm."

“The balance of the consideration of RMB2.5 billion has been settled by Mr Cheng and that completes a crucial step of the whole acquisition,” said Zhang Yi, chairman of Shunfeng Photovoltaic.

“The restructuring plan will be completed after we further receive the approval by shareholders at the EGM."

Anonymous said...

Why the new dates?

Anonymous said...

The judge may have extended the limited discovery period due to the holidays this week.

Where can the new response and hearing dates be found?

Shungfeng shareholders will vote on the Wuxi Suntech deal on January 10th at 11am Hong Kong time (http://www.hkexnews.hk/listedco/listconews/sehk/2013/1220/LTN20131220474.pdf).

The bonds traded at $9.60 & $9.65 yesterday.

I imagine the bondholders are threading to block the Shungfeng deal and the company's response to this development will also involve a new course in the US bankruptcy proceedings.

Anonymous said...

New date for hearing is 1/30

Anonymous said...

Can you confirm the hearing date on 1/30? where can find this date?

Anonymous said...

good

Anonymous said...

Last time I checked 1/30 was the date. You can follow the case at Pacer.gov

Anonymous said...

Jay nailed the petitioning creditors response that was filed on 11/20.

There will be an announcement by STPFQ JPLs following the Shungfeng shareholder vote next week and I expect Suntech will motion for Abstention under section 305(a)(1) the following week (in an attempt to buy more time, as such a motion may result in yet another hearing postponement).

The petitioning creditors and majority bondholders actually reached two agreements for the first and second hearing rescheduling (from 12/20 to 1/23 and then 1/30); so it may be that both parties are attempting to reach an agreement with STPFQ to convert the chapter 7 case into a chapter 15 or 11 case; this may occur following the divestment of STPFQ's operating assets or following the 1/30 hearing but before there is a ruling in the chapter 7 case.

One thing to keep in mind is that three of the four petitioning bondholders hold judgement rulings and that the structural priority of their claims gives them a stronger preference towards a liquidation, whereas the majority bondholders are inclined to prefer a restructuring that may increase the value of their holdings from current all time lows.

Jay established a bedrock foundation of facts (in paragraphs 12 & 45) as to why a chapter 15 conversion would be improper for STPFQ and makes clear that the only course of action STPFQ has left to protect itself as a debtor, even if first converting to the case from chapter 7 to chapter 15, would ultimately be for STPFQ to file for chapter 11 and convert the case from chapter 7 to chapter 11 (in paragraph 100 of his 11/20 response).

It will be interesting to see how this all plays out in the next two to three weeks.

Anonymous said...

Suntech is the worldwide leader at extending and pretending..

Still no end in sight.

Anonymous said...

Suntech is the worldwide leader at extending and pretending..

Still no end in sight.

Anonymous said...

That's true... but I think most of the extending and pretending is a result of Clearwater and Spinnaker. Somehow they seem to believe that suing Wuxi Guolian Administrator and/or Wuxi Intermediate People's Court over the BVI PSS share transfer will somehow realize value. Wuxi Suntech became "an independent person" as soon as the administrator was appointed under Chinese bankruptcy law and there is no legal precedent for what Spinnaker and Clearwater are trying to achieve. Who are the major investors in their funds? It's time to hold Spinnaker and Clearwater management
accountable for their failed investment in STPFQ bonds.

Anonymous said...

Solars showing no signs of letting up.

So much for that theory of delisting and the stock decaying towards zero.

Anonymous said...

Huge volume in the bonds today, a few trade lots over a million.

Anonymous said...

http://seekingalpha.com/article/1932621-court-documents-show-suntech-power-shares-almost-worthless

Court Documents Show Suntech Power Shares Almost Worthless

On December 9, 2013, Bingham McCutchen attorney Mark Fucci gave a declaration to the Southern District of New York Bankruptcy Court in Suntech's involuntary bankruptcy case. In his declaration, Fucci submitted the completed restructuring framework agreement signed by Suntech and majority bondholders. Page 4 of the deal clearly shows current shareholders will receive at most 1% of new shares after the restructuring is completed.

Anonymous said...

A bomb to Suntech shareholders! I hope to see a big price drop of STPFQ today. Waiting for this too long…
Not sure why some people still want to buy the default bond… how much value can be left in it? The comments in Seeking Alpha seem saying that nothing will be left in Suntech after Shunfeng's takeover…

Anonymous said...

A bomb to Suntech shareholders! I hope to see a big price drop of STPFQ today. Waiting for this too long…
Not sure why some people still want to buy the default bond… how much value can be left in it? The comments in Seeking Alpha seem saying that nothing will be left in Suntech after Shunfeng's takeover…

Anonymous said...

Did the Shunfeng vote already happen? If not, when is the date? 1/10?

Any thoughts on why the sudden increase in activity in the bonds?

Anonymous said...

To my knowledge, Shunfeng hasn't voted yet and the scheduled vote is on 1/10.
The judge from Wuxi court restated that the transfer of Suntech Singapore and Japan approved by the court is proper and has been completed. The issue here maybe Suntech liquidator making a lot of noise to block the deal. Who knows, after all, Suntech is the master of "extending and pretending".
Not sure why yesterday witnessed more bond activities. But seems to me that someone is willing to take a big loss now to sell at $12 for $5 Million is interesting. Instead of abandoning the ship in December 2013 to get at least for tax benefits, they decided to dump this bond now? Did they hear some really bad news?

CP said...

I'm surprised there wasn't more tax loss selling of the bonds and stock.

Anonymous said...

Note that the price of bonds increased yesterday and slightly again today.

There are at least 3 plausible reasons why the bonds are in demand right now:
1. A long short is buying bonds to hedge their short position in the equity.
2. A distressed debt investor is buying bonds to seek priority in the chapter 7 proceedings (and potentially a settlement with the Wuxi administrator).
3. Majority bondholders may also be selling bonds from one fund to another in order to "spread out" capital losses ahead of either a chapter 15 filing, or the appointment of a trustee in the chapter 7 proceedings.

There will be an announcement by the STPFQ JPLs following the Shungfeng vote (which will take place in Honk Kong before US markets open on Friday) and if Suntech Holdings intends to legally challenge the purported share transfer in the BVI, then the company will need more time and likely will seek relief under chapter 15 or 11 to stay the chapter 7 proceedings.

CP said...

Please move comments to the new thread:

http://www.creditbubblestocks.com/2014/01/suntech-comment-thread.html