Judge Rejects Vivint Bid to Sue SunEdison Over Merger
September 13 2016 - 12:40PM
Dow Jones News
A bankruptcy judge Tuesday rejected Vivint Solar Inc.'s bid to
sue SunEdison Inc. over its claim that a busted merger caused it $1
billion in damages.
Judge Stuart M. Bernstein of the U.S. Bankruptcy Court in New
York rejected Vivint's call to lift the automatic stay shielding
SunEdison from hostile litigation while his bankruptcy case is
pending. The stay, a cornerstone of U.S. bankruptcy law, halts
lawsuits and collection actions when a company or individual files
for chapter 11.
"Vivint has failed to make a prima facie showing that its claim
must be liquidated immediately or within a short (or any) time
frame whether here or in Delaware Chancery Court," wrote Judge
Bernstein in a 12-page decision.
Because of the size of Vivint's damages claim, the Blackstone
Group-backed company would have had significant bargaining power
when it comes to deciding a future course for SunEdison, a
renewable energy company that sought chapter 11 protection in
April.
Judge Bernstein, however, noted the merger litigation "is in its
infancy, and Vivint has not shown that its resolution is essential"
to SunEdison's reorganization.
Lawyers for Vivint and SunEdison weren't immediately available
for comment.
SunEdison hopes to reorganize, but since filing for bankruptcy
protection it has been selling off parts of its portfolio a series
of transactions designed to raise money for creditors. The sales
are still estimated to fall at least $1 billion short of its
debts.
Write to Patrick Fitzgerald at patrick.fitzgerald@wsj.com
(END) Dow Jones Newswires
September 13, 2016 12:25 ET (16:25 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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