Sungevity, a troubled solar panel sales company that two years ago opened a Kansas City office, has filed a bankruptcy reorganization petition in Delaware and reached an asset purchase agreement with a private equity firm.
Meanwhile, staff members laid off last week from the Kansas City office say their final paychecks bounced.
The company, based in Oakland, Calif., said this week that it has begun Chapter 11 proceedings in U.S. Bankruptcy Court for the District of Delaware in order to restructure, “strengthen its balance sheet and recapitalize the company.”
It announced an asset purchase agreement with a group of investors led by Northern Pacific Group, a private equity firm based in Wayzata, Minn. The investment group has agreed to provide up to $20 million in financing to fund Sungevity’s day-to-day operations and pay Chapter 11 expenses, the company said in a news release.
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Andrew Birch, Sungevity’s CEO, said the process will lead to a court-supervised sale of the company, which has “ample on-hand inventory” and “installation contracts (that) position us well to continue fulfilling our customers’ orders.”
Kansas City employees, who said late last week that their final paychecks failed to include overtime pay, accrued vacation pay or commissions due them, found when they checked their bank accounts that the paychecks had bounced, according to several workers.
Laid off workers received an email from Jonna Hensley, Sungevity’s “vice president, people,” that said to “please accept our deepest apologies and know that we are working quickly today to remedy the situation.” She asked recipients to “please stand by and I will update you asap.”
On the Chapter 11 bankruptcy form, the company checked a box indicating that “funds will be available for distribution to unsecured creditors.” The filing estimated the number of creditors at between 10,001 and 25,000.
Also on the form, the company valued its assets at between $100 million and $500 million and its liabilities in the same range. The largest unsecured claims were listed as convertible notes or trade payables.
Equity interests in Sungevity are held by Apollo Investment Corp., Helios Invest LLC, Jetstream Ventures LLC, Lowe’s Cos. Inc., and Peter Hawkins Dobberpuhl Foundation.
In the Chapter 11 proceeding, the company will seek court authorization to pay “certain prepetition obligations, support its business operations, and transition them through the sale process.” That includes paying “employee wages, taxes, insurance, critical venders, and utility providers.”
Sungevity’s new Kansas City office had been championed by economic development officials as a key win for downtown and for the metro area’s recruitment of new businesses. The company received state incentives tied to job creation, but only a fraction of the intended job growth and tax credits took place.
William Nettles, Sungevity’s newly appointed chief administration officer, said in the company’s news release that the company expects to emerge “stronger and more competitive” with “high quality employees.”
Sungevity previously had raised about $850 million in venture capital and project financing, with about $200 million of that in equity funding, according to an analysis posted by GreenTechMedia.com.
Company officials said they expected a final sale approval hearing and closing of the sales to occur by the end of April.