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Sundevil Holdings LLC Files for Chapter 11 Bankruptcy Protection
Author: Joel R. Glucksman
Date: April 8, 2016
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Sundevil Holdings LLC files Chapter 11
Sundevil Holdings LLC, a major West Coast power plant operator, has announced that it filed for Chapter 11 bankruptcy protection in U.S. Bankruptcy Court in Wilmington, Delaware. According to the Dow Jones Bankruptcy and Debt report, Sundevil sought bankruptcy protection after it had defaulted on more than $237 million in debt payments.
Sundevil Holdings LLC blames downward industry demand
In its bankruptcy documents, the company cited a market decline in electricity prices as well as a collapse of oil and natural gas prices for its financial shortcomings. Law 360 reported that this recent decline in energy prices coincided with long-term gas delivery agreements that were no longer profitable for the company. The company also stated that its issues began in 2010 after it purchased two power plants in Arizona from an Entegra Power Services LLC affiliate with the goal of profiting from a demand for gas energy during the recession. Demand never materialized at expected levels, which exposed the company to gradual declines in revenue in recent years.
Sundevil listed current assets and liabilities between $100 million and $500 million, according to Law 360. Its revenues totaled only $63.9 million from energy sales last year as most company facilities operated at 38.5 percent of their capabilities. The company’s debt load included $237 million to Beal Bank USA, a $160 million term loan credit agreement, a $25 million revolving credit and a $40 million incremental loan deal.
As a result of its mounting debt total, the company’s power plants shut down operations in October of last year. Company officials stated in its bankruptcy petition that operations were no longer economically feasible.
Sundevil Holdings LLC’s reorganization plan calls for debtor-in-possession financing
In bankruptcy filings, the company stated that it will seek court approval for $45 million in debtor-in-possession financing to maintain its current operations through the bankruptcy period. Beal Bank USA, the debtor-in-possession financier, will provide $7.5 million immediately upon court approval of the company’s bankruptcy petition.
Sundevil will also hold an asset auction sale on May 2, whereupon it will look to sell off a substantial portion of its remaining assets. Despite its previous efforts, Sundevil has failed to secure any potential buyers for its remaining assets. The goal of this asset sale is to either find an investor to infuse operating capital into the company, or a buyer who will purchase some or all of its assets.
Are you a creditor in a bankruptcy? Have you been sued by a bankrupt? If you have any questions about your rights, please contact me, Joel Glucksman, at 201-806-3364.
Otherwise, for more related articles on energy providers dealing with Bankruptcy, check out:
- Swift Energy files for Chapter 11 Bankruptcy Protection
- Cubic Energy Inc. files for Chapter 11 Bankruptcy Protection
- RAAM Global Energy Co files for Chapter 11 Bankruptcy Protection
- Practices: Bankruptcy & Creditors' Rights
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Sundevil Holdings LLC Files for Chapter 11 Bankruptcy Protection
Author: Joel R. Glucksman
Sundevil Holdings LLC files Chapter 11
Sundevil Holdings LLC, a major West Coast power plant operator, has announced that it filed for Chapter 11 bankruptcy protection in U.S. Bankruptcy Court in Wilmington, Delaware. According to the Dow Jones Bankruptcy and Debt report, Sundevil sought bankruptcy protection after it had defaulted on more than $237 million in debt payments.
Sundevil Holdings LLC blames downward industry demand
In its bankruptcy documents, the company cited a market decline in electricity prices as well as a collapse of oil and natural gas prices for its financial shortcomings. Law 360 reported that this recent decline in energy prices coincided with long-term gas delivery agreements that were no longer profitable for the company. The company also stated that its issues began in 2010 after it purchased two power plants in Arizona from an Entegra Power Services LLC affiliate with the goal of profiting from a demand for gas energy during the recession. Demand never materialized at expected levels, which exposed the company to gradual declines in revenue in recent years.
Sundevil listed current assets and liabilities between $100 million and $500 million, according to Law 360. Its revenues totaled only $63.9 million from energy sales last year as most company facilities operated at 38.5 percent of their capabilities. The company’s debt load included $237 million to Beal Bank USA, a $160 million term loan credit agreement, a $25 million revolving credit and a $40 million incremental loan deal.
As a result of its mounting debt total, the company’s power plants shut down operations in October of last year. Company officials stated in its bankruptcy petition that operations were no longer economically feasible.
Sundevil Holdings LLC’s reorganization plan calls for debtor-in-possession financing
In bankruptcy filings, the company stated that it will seek court approval for $45 million in debtor-in-possession financing to maintain its current operations through the bankruptcy period. Beal Bank USA, the debtor-in-possession financier, will provide $7.5 million immediately upon court approval of the company’s bankruptcy petition.
Sundevil will also hold an asset auction sale on May 2, whereupon it will look to sell off a substantial portion of its remaining assets. Despite its previous efforts, Sundevil has failed to secure any potential buyers for its remaining assets. The goal of this asset sale is to either find an investor to infuse operating capital into the company, or a buyer who will purchase some or all of its assets.
Are you a creditor in a bankruptcy? Have you been sued by a bankrupt? If you have any questions about your rights, please contact me, Joel Glucksman, at 201-806-3364.
Otherwise, for more related articles on energy providers dealing with Bankruptcy, check out:
- Swift Energy files for Chapter 11 Bankruptcy Protection
- Cubic Energy Inc. files for Chapter 11 Bankruptcy Protection
- RAAM Global Energy Co files for Chapter 11 Bankruptcy Protection