Judge Christopher M. Lopez of the U.S. Bankruptcy Court for the Southern District of Texas has approved an agreement to settle a suit brought by the Official Committee of Unsecured Creditors in the Chapter 11 proceedings of TPI Composites, Inc. The suit challenged an up-tier transaction made between the wind turbine blade company and TPI’s lender, Oaktree Capital Management L.P., just two years before it filed for bankruptcy.
As reported by Law360, the settlement will allow holders of unsecured claims to share in recoveries due to Oaktree, enabling unsecured creditors to receive net recoveries of up to $18 million.
In 2023, Oaktree exchanged $436 million in preferred equity for a $393 million senior secured term loan and $43 million of common equity. The Committee asserted that this transaction had occurred while Oaktree knew TPI was probably insolvent, that Oaktree failed to provide any consideration for the transaction, and that the deal gave Oaktree liens on TPI's assets that ensured its repayment in a restructuring before the repayment of all other claims, including those of the unsecured creditors.
Michael A. Kaplan, Jeffrey L. Cohen, David M. Posner, Eric Chafetz, and Erica G. Mannix of Lowenstein’s Bankruptcy & Restructuring Department represent the Committee with Munsch Hardt Kopf & Harr PC as Texas counsel and Berkeley Research Group, LLC as the Committee’s financial advisor.
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