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Solar power company Suntech faces Chapter 7

A company best-known for its production of solar panels is facing a cloudy day after bondholders have pushed for loan repayments, according to local business news. Suntech Power Holdings may be best known to South Carolina natives as the foremost producer of the panels used to gather solar energy. The company is under a different kind of fire courtesy of its several bondholders, which have requested a Chapter 7 filing to repay the company's outstanding debt.

According to court records supplied, this is not the first fiscal stumbling block faced by Suntech. The company has previously defaulted on a $541 million convertible note earlier this year. Its bondholders are now seeking in excess of $580,000 in back payments, a move which they say will require a liquidation of the type afforded by a Chapter 7 filing.

As many business owners are already aware, the Chapter 7 bankruptcy filing distinguishes itself from other types of bankruptcy by constituting a full liquidation of all the company's assets. This effectively causes the company's closure and dissolution. Compared to other bankruptcy strategies including debt restructuring, this may seem like a harsh sentence to pass down to a company, but this could not be farther from the truth.

Suntech's owners may very well benefit from a Chapter 7 filing, as it could allow them to move forward with their personal finances intact. If they wish, they may be able to re-enter the market with a stronger financial footing. South Carolina business owners facing a bankruptcy filing may wish to remember that it is not necessarily a failure, but rather can be a path to future success.

Source: pv-tech.org, Suntech bondholders seek Chapter 7 bankruptcy proceedings to return funds, Mark Osborne, Oct. 15, 2013

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