In a unique circumstance, four Chinese solar panel companies are seeking bankruptcy court protection in New Jersey for their U.S. assets — namely, 275,000 panels stored in the Garden State.
The bankruptcy division of Archer & Greiner, a law firm with offices across the state, filed petitions on behalf of the companies in U.S. Bankruptcy Court in Camden under Chapter 15, which governs the proceedings of foreign debtors.
The collection of cases, which Archer & Greiner attorneys announced last week, is believed to be the only filing of its kind from mainland China under Chapter 15; Stephen Packman, who is counseling the Chinese companies, explained:
“This is the first time, to our knowledge, debtors from (mainland China), with bankruptcy proceedings pending there, have elected to utilize the bankruptcy system here.”
Zhejiang Topoint Photovoltaic Co. Ltd. and its three affiliates, Zhejiang Jiutai New Energy Co. Ltd., Zhejiang Yutai Solar Materials Co. Ltd. and Zhejiang Willsolar Photoelectric Materials Co. Ltd., are the debtors in question.
As Packman alluded to, the companies, all based in Haining City, Zhejiang Province, are currently debtors in bankruptcy proceedings before a Chinese court on a consolidated basis.
In aiming to protect their Bridgeton-warehoused solar panels, the debtors’ four U.S. cases will also be jointly administered, as ordered by Gloria Burns, chief judge of U.S. Bankruptcy Court for the District of New Jersey.
On Tuesday, Packman said Burns decided to grant recognition of the foreign main proceeding in China — another distinctive aspect of the case.
“Part of that decision is, in a way, giving credence to the fact that there are insolvency laws there that are not inconsistent with the laws and public policy of the U.S.,” he added. “In that respect, (this case is) precedential.”
According to Archer & Greiner, the Chinese companies encountered "financial difficulties" when America’s financial downturn led to less demand for solar energy.
The solar panels they stored in New Jersey were shipped to the state in 2011 and 2012, as the companies were aspiring to grow U.S. sales. Those panels never left the warehouse.
“There were plans to develop certain solar projects here,” Packman said. “The solar market went the wrong way, unfortunately, for a time. So it certainly did impact, to a small extent, the economy here.”
The debtors’ end-goal is to get relief under the U.S. Bankruptcy Code — to gain control of the assets and dispose of them, pursuant to the Chinese bankruptcy proceedings.
Burns has yet to decide on certain issues regarding the New Jersey assets. Packman said those decisions are slated to be made later this week.
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