SunPower (SPWR) Files Chapter 11

On August 5, 2024 (the “Petition Date”), SunPower (NASDAQ: SPWR) and certain of its direct and indirect subsidiaries (collectively, the “Company Parties”) filed voluntary petitions (the “Chapter 11 Cases”) under Chapter 11 of the U.S. Bankruptcy Code (the “Bankruptcy Code”) in the U.S. Bankruptcy Court for the District of Delaware (the “Bankruptcy Court”). On the Petition Date, the Company Parties filed a motion with the Bankruptcy Court seeking to jointly administer the Chapter 11 Cases under the caption “In re SunPower Corporation, et al., Case No. 24-11649”. The Company Parties intend to use this court-supervised process to pursue a range of options to maximize value of their assets and address their financial obligations.

The Company Parties continue to operate their businesses and manage their properties as “debtors-in-possession” under the jurisdiction of the Bankruptcy Court and in accordance with the Bankruptcy Code and orders of the Bankruptcy Court. The Company Parties have filed a number of customary “first day” motions seeking the Bankruptcy Court’s authorization to support their operations during the court-supervised process, including a consensual cash collateral motion and a motion to pay certain employee wages and benefit obligations. The Company Parties expect that the Bankruptcy Court will approve the relief sought in these motions on an interim basis.

On August 5, 2024, prior to the filing of the Chapter 11 Cases, the Company and its subsidiaries named therein (together, the “Sellers”) entered into an Asset Purchase Agreement (the “Asset Purchase Agreement”) with Complete Solaria, Inc., a Delaware corporation (“Purchaser”), pursuant to which, subject to the terms and conditions set forth in the Asset Purchase Agreement, Purchaser agreed to acquire certain assets related to the Sellers’ Blue Raven Solar business, New Homes business, and non-installing Dealer network (collectively, the “Assets”) and assume certain specified liabilities of the Sellers (collectively, the “Liabilities” and such acquisition of the Assets and assumption of the Liabilities together, the “Transaction”), for a total purchase price of $45.0 million in cash (the “Purchase Price”). 10% of the Purchase Price shall be paid by Purchaser into an escrow account (the “Deposit”).
Upon Bankruptcy Court approval, Purchaser is expected to be designated as the “stalking horse” bidder in connection with a sale of the Assets under section 363 of the Bankruptcy Code. The Transaction will be conducted through a Bankruptcy Court-supervised process pursuant to Bankruptcy Court-approved bidding procedures and is subject to the receipt of higher or better offers from competing bidders at an auction, approval of the sale by the Bankruptcy Court, and the satisfaction of certain conditions. Subject to Bankruptcy Court approval, in the event that Purchaser is not the successful bidder at the auction, Purchaser may be entitled to a break-up fee equal to approximately 3% of the Purchase Price plus reimbursement of expenses up to $550,000.
The Asset Purchase Agreement contains customary representations, warranties and covenants of the parties for a transaction involving the acquisition of assets from a debtor in bankruptcy, and the completion of the Transaction is subject to a number of customary conditions, which, among others, include the entry of an order of the Bankruptcy Court authorizing and approving the Transaction, the performance by each party of its obligations under the Asset Purchase Agreement and the accuracy of each party’s representations, subject to certain materiality qualifiers.
The Asset Purchase Agreement may be terminated by either party in certain scenarios, including for breach or upon failure to obtain Bankruptcy Court approval. Upon termination of the Asset Purchase Agreement, the Deposit will be returned to Purchaser, except in the event of certain specified termination triggers, including due to the Purchaser’s material breach of the Asset Purchase Agreement such that the closing conditions specified therein could not be satisfied by September 30, 2024.

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