It’s a sadly common story. A perfectly healthy company decides it must grow fast, probably to pump up the stock price so insiders get rich quick.. It goes billions in debt, buys lots of companies. Then, when the inevitable change in market conditions happens that no one could have predicted, finds it can no longer pay the debt. In the case of SunEdison, plunging oil prices made solar less attractive, causing their house of cards to topple.
So, a whole lot of people will lose their jobs. The resultant lawsuits will take years to resolve. And none of it needed to happen and was completely avoidable. But such greedy piggishness is what too often passes for capitalism now. Oh yes, I’m sure the tops execs at SunEdison will still walk away with millions.
SunEdison’s downward spiral was largely a result of the company’s overly ambitious vision and aggressive financing schemes. Much of SunEdison success was dependent upon a stable market environment, which of course turned out to be far more volatile than imagined. While SunEdison’s massive problems were far from evident when the company was flying high, they now appear obvious in hindsight.
There will lots of collateral damage too.
Potential legal damages stemming from deals SunEdison failed to close while its finances were deteriorating could total hundreds of millions of dollars, according to court filings and people familiar with the deals. Litigation over the failed deals could add to the company’s already lengthy list of creditors and possibly extend to its publicly traded subsidiaries.
Company description:
SunEdison is the largest global renewable energy development company and is transforming the way energy is generated, distributed, and owned around the globe. The company develops, finances, installs, owns and operates renewable power plants, delivering predictably priced electricity to its residential, commercial, government and utility customers. SunEdison is one of the world’s largest renewable energy asset managers and provides customers with asset management, operations and maintenance, monitoring and reporting services.