To say the least the Suniva bankruptcy has been interesting. However, it’s placing most of the US solar industry—and the 260,000 people it employs—at risk over a controversial filing with the International Trade Commission (ITC). The commission decided to hear the petition this week. Now it appears one of Suniva’s investors is behind the filing, saying it would drop the case if someone purchases the equipment it financed.
The firm behind the controversial Section 201 filing is apparently SQN Capital Management. In early May, shortly after Suniva announced its bankruptcy the company sent a letter to the China Chamber of Commerce for Import & Export of Machinery & Electronic Products, according to Bloomberg. The letter explained that if a Chinese solar manufacturer purchased the $51 million of equipment SQN financed for Suniva and valued at $55 million then the case would end.
“In order for Suniva to put forth the case, the company must remain in existence,” SQN wrote in a letter to the Chinese organization. “The only way Suniva could survive while the trade case is being pursued was to file Chapter 11 Bankruptcy, which provides protection from creditors. The cost of filing Chapter 11 and pursuing the trade is approximately USD$4 million which SQN is funding through a debtor in possession order.”
The investment firm added: “If SQN were to arrange a sale of the equipment that secures its investment, SQN would have no interest in providing additional funding to Suniva and the company would have to convert to a Chapter 7 Bankruptcy where the assets are liquidated and the company ceases to exist.” In that case, SQN said there would be no company pursue the case further.
If the petition were approved it would place tariffs on Chinese solar imports, raising the price of solar panels by up to 78 cents per watt—almost doubling their cost. That would impact customers across the US.
The solar industry is concerned about the filing, particularly in light of the Trump Administration’s push for more coal and domestic manufacturing. “While we respect the ITC's decision to evaluate this claim on its merits, SEIA will remain at the forefront of the opposition to Suniva's requested remedies,” said Solar Energy Industries Association (SEIA) CEO Abigail Ross Hopper.
“The International Trade Commission’s decision to consider Suniva’s petition for a lifeline could be bad news for hundreds of thousands of American workers in the solar industry and may jeopardize billions of dollars in investment in communities across the country,” said Solar Energy Industries Association CEO Abigail Ross Hopper. “Setting high price floors and exorbitant tariffs is a blunt instrument that would cripple one of the brightest spots in America’s economy.”Tweet