SunEdison Inc.'s Problems Are Only Getting Worse

By Travis

Image source: SunEdison.

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It seems like every day there's some sort of bad news for SunEdison Inc. . Already, SunEdison has delayed is annual filing with the Securities and Exchange Commission (twice) and there's no indication that we'll see the report anytime soon. As if that weren't bad enough, the SEC is investigating the company's disclosures that are part of the delayed filings and those of its cash position.

Earlier this week, one of its yieldcos said in an SEC filing that there was "substantial risk that SunEdison will soon seek bankruptcy protection."The latest blow was a subpoena from the U.S. Department of Justice seeking information about former acquisition targets, project financing, and transactions with TerraForm Power (NASDAQ: TERP) and TerraForm Global (NASDAQ: GLBL). It should be plain to all that the mess for SunEdison is far from over.

What the DOJ wants from SunEdison Let's look at the latest government agency is specifically looking for. The DOJ has requested documents about the following five items:

You might remember that questions about the Vivint Solar transaction and dropdowns to TerraForm Power and TerraForm Global were central to billionaire hedge fund manager David Tepper's attack on SunEdison starting late in 2015. This seems to be even more vindication that he was right that SunEdison wasn't being run properly, especially when it came to the yieldcos.

The biggest problem management has faced yet Given the massive collapse of SunEdison and the billions of dollars shareholders have lost, it's not surprising that the SEC is investigating the company. But the DOJ investigation goes beyond the norm and could support Vivint Solar's accusation that there was a "willful breach of the merger agreement" between the companies.

Given all of the distractions, it's hard to see how SunEdison could avoid bankruptcy much longer. It needs a fresh start as a company and to refocus with a new management team and less bloated balance sheet/business. That's likely on the near-term horizon.

The article SunEdison Inc.'s Problems Are Only Getting Worse originally appeared on

Travis Hoium has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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