TerraForm Power Makes Information Available Concerning Claims Against SunEdison
Meets with
Files Initial Proof of Claim in SunEdison Bankruptcy
- SunEdison’s failure to perform under the integrated sponsorship arrangement put in place at the time of TerraForm Power’s initial public offering constitutes a material breach and, if not remedied, excuses
TerraForm Power from payment or performance of its contractual obligations under the sponsorship arrangement. - Absent remedy of all material sponsorship defaults,
TerraForm Power is not obligated to exchange SunEdison’s sponsor promote (in the form of ‘B Units’ ofTerraForm Power LLC and ‘B Shares’ ofTerraForm Power, Inc. ) for class A common stock ofTerraForm Power .SunEdison or any subsequent holder of B Units and B Shares is subject to the terms and conditions of the B Units and B Shares, as well as TerraForm Power’s rights and defenses arising from any failure to remedy SunEdison’s defaulted sponsorship. - As a result of its defaults,
SunEdison has not met the conditions necessary to receive distributions on the B Units due to the limitation on sponsor distributions in the TerraForm Power LLC Agreement, which subordinates sponsor distributions to distributions for the benefit of public stockholders. The current arrearage due to the A Units is expected to be approximately$103.3 million following the end of 2016, and is expected to increase by approximately$21 million for each quarter thereafter until distributions for the benefit of public stockholders are resumed. After distributions are resumed, the A units must receive at least the Minimum Quarterly Distribution (MQD) (22.6 cents per quarter) before B distributions can commence, and any shortfall to the MQD becomes an arrearage that must be paid before a B distribution can occur. The subordination period will last until the A units have received the MQD for three non-overlapping periods of four consecutive quarters. - Transfer of the B Shares of
TerraForm Power, Inc. is prohibited by its corporate charter during or after SunEdison’s bankruptcy. - Transfers of certain B Units and IDRs of
TerraForm Power, LLC are subject to limitations under the TerraForm Power LLC Agreement, and the Company is assessing the application of these limitations during and after SunEdison’s bankruptcy. - As set forth in its proof of claim filed in the
SunEdison bankruptcy,TerraForm Power has claims againstSunEdison that are estimated to be in excess of$1.0 billion . The claims include, without limitation, claims for damages relating to breach ofSunEdison's obligations under the sponsorship arrangement and other agreements; contribution and indemnification claims arising from litigation; claims relating to SunEdison’s breach of fiduciary, agency and other duties; and claims for interference with and the disruption of the business ofTerraForm Power and its subsidiaries, including the loss of business opportunities, loss of business records, failure to provide timely audited financials, and the increased cost of financing and commercial arrangements. Many of these claims are contingent or unliquidated; estimated amounts may change substantially as circumstances develop and damages are determined. TerraForm Power will supplement its initial proof of claim on or beforeOctober 7 with project-level claims, pursuant to a court-ordered stipulation betweenTerraForm Power and SunEdison. Project level claims are in addition to the corporate-level claims described above.
- In the event of a rejection of SunEdison’s sponsorship arrangement,
TerraForm Power will have additional claims for rejection damages. Certain of these claims may overlap with other corporate-level and project-level claims. - Certain claims of
TerraForm Power are entitled to administrative priority. In addition, any future breaches of control person, fiduciary, agency or custodial duties bySunEdison or its stakeholders may result in additional administrative claims. No bar date has been set for administrative claims in theSunEdison bankruptcy. - Certain claims of
TerraForm Power will give rise to recoupment or other defenses to actions to enforceSunEdison rights as sponsor, during or after theSunEdison bankruptcy.
“TerraForm Power has lost a large part of its enterprise value as a result of SunEdison’s catastrophic breach of its sponsorship and legal duties,” said
The foregoing are positions of
About
Cautionary Note Regarding Forward-Looking Statements
This communication contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements can be identified by the fact that they do not relate strictly to historical or current facts. These statements involve estimates, expectations, projections, goals, assumptions, known and unknown risks, and uncertainties and typically include words or variations of words such as “expect,” “anticipate,” “believe,” “intend,” “plan,” “seek,” “estimate,” “predict,” “project,” “goal,” “guidance,” “outlook,” “objective,” “forecast,” “target,” “potential,” “continue,” “would,” “will,” “should,” “could,” or “may” or other comparable terms and phrases.
They include, without limitation, statements relating to the settlement of intercompany claims and defenses; the integration of the sponsor agreements; the amount and nature of claims of the Company against
The risks included above are not exhaustive. Other factors that could adversely affect our business and prospects are described in the filings made by us with the
Contacts: Investors:Brett Prior TerraForm Power bprior@terraform.com (650) 889-8628 Media:Meaghan Repko /Michael Freitag /Nicholas Leasure Joele Frank , Wilkinson Brimmer Katcher media@terraform.com (212) 355-4449