“As expected, Suntech Power Holdings Co. Ltd. (NYSE: STP) failed to make a required $541 million bond repayment scheduled for last Friday. The company claimed last week to have reached forbearance agreements with about 60% of its foreign bondholders, who agreed to give the struggling solar panel maker an additional two months to either pay or renegotiate.
The failure to make Friday’s payment is a default and a bankruptcy filing is a distinct possibility. Bondholders who did not agree to any forbearance are reported to be demanding that the trustee file an involuntary bankruptcy notice. If such a filing should occur, the bankruptcy could be either a Chapter 7 liquidation or a Chapter 11 reorganization. …”
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