• Subscribe
  • Log In
  • Home
  • Daily Diary
  • Asset Class
    • U.S. Equity
    • Fixed Income
    • Global Equity
    • Commodities
    • Currencies
  • Sector
    • Basic Materials
    • Consumer Discretionary
    • Consumer Staples
    • Energy
    • Financial Services
    • Healthcare
    • Industrials
    • Real Estate
    • Technology
    • Telecom Services
    • Transportation
    • Utilities
  • Latest
    • Articles
    • Video
    • Columnist Conversations
    • Best Ideas
    • Stock of the Day
  • Street Notes
  • Authors
    • Bruce Kamich
    • Doug Kass
    • Jim "Rev Shark" DePorre
    • Helene Meisler
    • Jonathan Heller
    • - See All -
  • Options
  • RMPIA
  • Switch Product
    • Action Alerts PLUS
    • Quant Ratings
    • Real Money
    • Real Money Pro
    • Retirement
    • Stocks Under $10
    • TheStreet
    • Top Stocks
    • Trifecta Stocks
  1. Home
  2. / Investing
  3. / Energy

SunEdison Shares Jump but It May Be Too Early to Celebrate

Thursday's court ruling in favor of SunEdison still gives David Tepper options in his bid to block a deal.
By CARLETON ENGLISH Feb 26, 2016 | 04:42 PM EST
Stocks quotes in this article: SUNE, TERP, VSLR

Although a Delaware court cleared a major obstacle standing the way of SunEdison's (SUNE) plan to acquire Vivint Solar (VSLR), it may be too soon to celebrate just yet. The judge left open the possibility of the case going to trial, according to a source close to the matter.

In January, David Tepper's Appaloosa Management filed a complaint against SunEdison, alleging that SunEdison breached its fiduciary duty to its yieldco, TerraForm Power (TERP) and its minority stakeholders in its plans to acquire Vivint in a deal which was initially announced for $2.2 billion in July. Terms of the deal were renegotiated downward in December but TerraForm Power would be required to pay SunEdison $799 million under the new transaction, according to a note released by J.P. Morgan Securities on Friday.

On Thursday, Judge Andre Bouchard denied the injunction, saying that it was not clear whether TerraForm Power faced imminent harm from the transaction becuase it appeared to have sufficient liquidity to operate through 2016, the source told Real Money. According the same source, the judge said he still had serious questions about the fairness of the transaction and opened of the possibility of the case going trial.

On Friday, David Tepper told Real Money that he was waiting for the release of the transcript from the ruling before making a decision on how to proceed.

SunEdison declined to comment beyond the following statement, which was released on Thursday: "We are gratified that the court denied the injunction and now we look ahead to continuing to navigate current market conditions."

Thursday's ruling by Judge Bouchard was not on the merits of the case, the source told Real Money, it was a ruling on whether there should be a preliminary injunction based on the "take or pay" agreement. (Such contracts, which are common in MLP or yieldco structures induce one party to take something from a supplier or pay a penalty. In the case of TerraForm Power, it could buy projects from SunEdison or pay a fee for not doing so.) 

The complaint filed by Appaloosa states that SunEdison's planned acquistion of Vivint is unfair to TerraForm Power because it requires TerraForm Power to purchase Vivint projects under the take or pay arrangement. Vivint's portfolio of residential solar projects were called less creditworthy in the complaint and were also said to be incompatible with TerraForm Power's business.

"The purchase transaction was all about SunEdison using TERP as a personal piggy bank, and dumping ground for unwanted assets, in order to achieve SunEdison's business objectives," the complaint stated.

Get an email alert each time I write an article for Real Money. Click the "+Follow" next to my byline to this article.
TAGS: Investing | U.S. Equity | Energy

More from Energy

3 Oil & Gas Royalty Trusts For $100 Oil

Bob Ciura
May 20, 2022 2:05 PM EDT

For investors looking to take advantage of lofty oil and gas prices, we like these investment vehicles.

Exxon Mobil Nears an Historic Upside Breakout on the Charts

Bruce Kamich
May 20, 2022 9:56 AM EDT

Here's my advice for traders.

Constellation Energy Could Power 20% Higher From Here

Bruce Kamich
May 20, 2022 7:34 AM EDT

Shares of the clean energy power generator have rallied since going public in January.

Oil, War and Inflation: Here's Where Prices Are Likely Headed

Carley Garner
May 18, 2022 1:00 PM EDT

Oil has a war and inflation hedge premium, but those aren't permanent.

Occidental Petroleum Continues to Target Higher Prices

Bruce Kamich
May 16, 2022 2:52 PM EDT

Here's our first price target and our long term objective.

Real Money's message boards are strictly for the open exchange of investment ideas among registered users. Any discussions or subjects off that topic or that do not promote this goal will be removed at the discretion of the site's moderators. Abusive, insensitive or threatening comments will not be tolerated and will be deleted. Thank you for your cooperation. If you have questions, please contact us here.

Email

CANCEL
SUBMIT

Email sent

Thank you, your email to has been sent successfully.

DONE

Oops!

We're sorry. There was a problem trying to send your email to .
Please contact customer support to let us know.

DONE

Please Join or Log In to Email Our Authors.

Email Real Money's Wall Street Pros for further analysis and insight

Already a Subscriber? Login

Columnist Conversation

  • 02:24 PM EDT PAUL PRICE

    An Interesting Chart

    I'm betting heavily that stocks will be way up aga...
  • 10:10 AM EDT JAMES "REV SHARK" DEPORRE

    This Weekend on Real Money

    "Market Timing for Dummies"
  • 01:44 PM EDT STEPHEN GUILFOYLE

    Stocks Under $10 Portfolio

    We're making a series of trades here.
  • See More

COLUMNIST TWEETS

  • A Twitter List by realmoney
About Privacy Terms of Use

© 1996-2022 TheStreet, Inc., 225 Liberty Street, 27th Floor, New York, NY 10281

Need Help? Contact Customer Service

Except as otherwise indicated, quotes are delayed. Quotes delayed at least 20 minutes for all exchanges. Market Data & Company fundamental data provided by FactSet. Earnings and ratings provided by Zacks. Mutual fund data provided by Valueline. ETF data provided by Lipper. Powered and implemented by FactSet Digital Solutions Group.

TheStreet Ratings updates stock ratings daily. However, if no rating change occurs, the data on this page does not update. The data does update after 90 days if no rating change occurs within that time period.

FactSet calculates the Market Cap for the basic symbol to include common shares only. Year-to-date mutual fund returns are calculated on a monthly basis by Value Line and posted mid-month.

Compare Brokers

Please Join or Log In to manage and receive alerts.

Follow Real Money's Wall Street Pros to receive real-time investing alerts

Already a Subscriber? Login