Progress Being Made On SunEdison Inc (OTCMKTS:SUNEQ)

SunEdison Inc (OTCMKTS:SUNEQ) is starting to make progress in bankruptcy court. Last month, the bankrupt solar company received final Bankruptcy Court approval of debtor-in-possession (DIP) financing in the form of new capital totaling up to $300 million provided by a consortium of first and second lien lenders. This was a critical step in allowing SunEdison to support its continuing business operations, minimize disruption to its worldwide projects and partnerships, and make necessary operational changes. The $300 million is the first tranche of a $1.3 billion package SunEdison has negotiated with its creditors.In other developments, former CEO Ahmad Chatila resigned and Chief Restructuring Officer John Dubel was named as new CEO. The problem with this is that Chatila was left in the CEO chair way too long. He's been the CEO since 2009 and led the company through a two-year $3.1B acquisition spree while racking up $16B in liabilities. This man destroyed SunEdison and cost shareholders billions of dollars. Why the board chose to leave him in charge for so long is beyond comprehension. It's sad the board waited this long.SunEdison also appointed new leadership of its finance team, including Philip J. Gund, as Chief Financial Officer and Salvatore LoBiondo, Jr., as SVP, Corporate Controller, enhancing the Company's financial operations as the Company moves through the chapter 11 process. Both individuals are experienced restructuring executives and Senior Managing Directors with Ankura Consulting Group, LLC, a business advisory and expert services firm.Among SunEdison’s biggest creditors are TerraForm Power Inc. and TerraForm Global Inc. These yieldcos are public, non-bankrupt companies that SunEdison created to buy the wind and solar projects it develops. TerraForm Power has started climbing again after Brookfield Asset Management disclosed a 12.13% active stake. Brookfield certainly smells opportunity and is part of the smart money crowd. TerraForm’s assets could be a good fit for Brookfield, which owns and operates more than 250 clean-energy plants with more than 10 gigawatts of capacity.Brookfield most likely wants to buy SunEdison's class B shares of TerraForm and take over operations. If this were to occur, it would most likely involve a settlement between SunEdison and TerraForm with SunEdison getting cash for its shares and TerraForm settling its creditor claims.Right now, it looks like SunEdison is looking to raise as much cash as possible to exit bankruptcy. The company is now in negotiations with hedge fund DE Shaw over its 150 MW Californian solar plant. The price looks to be around $80 million. SunEdison is also selling the rights to the King Pine Wind project in Maine to Pattern Energy. SunEdison expects to get about $26.5 million for this project.In its bankruptcy filing, SunEdison reported $20 billion in assets and $16 billion in liabilities. Its global portfolio is well spread out and the key is getting top dollar for its assets. What common shareholders are waiting on now is whether an equity committee will be formed or not. SunEdison's new management and lawyers appear to be working for secured creditors and not stockholders anymore. The company told the bankruptcy court, "Simply put, there is no basis to conclude that there will be any recovery - let alone a 'meaningful' one - for equity holders."The equity committee is extremely important to common shareholders. This gives them a seat at the table and allows common shareholders to negotiate with creditors and debt holders. The equity committee also can have its expenses covered through the bankruptcy court process. For those that doubt if an equity committee will be formed, one was just granted in the bankruptcy of Horsehead Holding Corp (OTCMKTS:ZINCQ) where we believe there is still hope for common stockholders.Leading the charge for SunEdison common shareholders is the Investor Recovery Charitable Trust. The Trust represents 268 individual shareholders that together own over 13 million shares which makes them a little over 4% owner. This allows for one voice to make a coherent argument to the Judge in support of the equity committee.Currently trading with a market cap of $43 million, SUNEQ is a lotto ticket trading on the OTC Markets. It's really going to come down to the Judge and whether he allows shareholders a seat at the table. If this happens, shares could easily spike to $1. If the Judge rules against shareholders, common shareholders will be wiped out and get nothing.As we said before, the reality is that the battle over SunEdison is going to be long and expensive. In the meantime, we don’t think existing shareholders should sell at these levels. Many have been in this long, so why get out now? It has a big enough following that the slightest bit of good news will send shares higher on dip buying and short covering. We will be updating Insider Financial as soon as we know more. For continuing coverage on SUNEQ, sign up for our free newsletter today and get our next hot stock pick and a free eBook as an added bonus!Disclosure: We have no position in SUNEQ and have not been compensated for this article.