☀️New Chapter 11 Bankruptcy Filing - Pine Gate Renewables, LLC☀️
Judge Lopez realizes, kinda, that due process exists in another solar co. BK.
On November 6, 2025, Asheville-based Pine Gate Renewables, LLC (“PGR”) and 118 affiliates (collectively, together with PGR, the “debtors” and together with 761 — no, that’s not a typo— non-debtor affiliates, the “company”) filed chapter 11 sale cases in the only venue Ray Schrock knows: the Southern District of Texas (Judge Lopez). The company is a developer and owner-operator of “utility-scale” solar power facilities throughout the US and, through debtor Blue Ridge Power, LLC and non-debtor Affiliate ACT Power, also dabbles in engineering, procurement, and construction services and operations and maintenance for third parties and itself.*
Good lord are we tired of failed solar companies. There’s nothing original or interesting about the slew of excuses — “… increased interest rates, changes in the regulatory environment, and inflationary pressures …” Without getting into whether “changes in the regulatory environment” are good or bad, we all know what it is code for.
Just say it, wimps.
Ugh, at least the history here is more entertaining than most. After failing to find a buyer in ‘24 and the pre-bankruptcy part of ‘25, the company’s banker, Lazard Frères & Co. LLC ($LAZ) reached out broadly for a DIP, including, obvi, the company’s “corporate-level” secured lenders — Brookfield Asset Management ($BAM), The Carlyle Group ($CG), and Fundamental Renewables (“Fundamental” and together with BAM and CG, the “bridge/DIP lenders”), each of which had funded its respective silo in the org chart above. Specifically, as of the petition date, BAM had supplied $300mm, GC tossed in $244mm, and Fundamental was good for $599mm.
Third parties were, for once, interested: the company received two offers from lenders outside the cap stack, but allegedly neither was enough to fund a “full” chapter 11 case. More importantly, the bridge/DIP lenders apparently had more cash to burn. They responded to LAZ with a one-two punch combination out-of-court and in-court financing (the “combo funding”), contingent on each other, which resulted in three new financings that closed on October 6, 2025. A whole month before the bankruptcy.
The new injections gave the company, which previously had $8.5mm to its name, another $412mm to play with, composed of, at the time, up to ~$208mm in out-of-court, “interim” financing (the “pre-DIP DIP”) and the balance (plus any undrawn amounts from the out-of-court cash) as an honest-to-g-d postpetition DIP.
By the time the petitions landed, the debt stack looked like this:
Well, if you ignore $63mm in fees under the out-of-court loans, which just so happened to have not made their way to the chart. Holy hell, ~38.1% in fees for one month. Directors oughta get sued.
We’ll set that to the side. Getting back on track, each bridge/DIP lender also agreed to serve as a credit bidding stalking horse for its respective collateral … helped, in part, because they cross-collateralized on the eve of bankruptcy.** Two ways. To explain, here’s Ray Shem, the co-founder, President, and CFO of PGR:
“In exchange for this financing and go-forward commitments, the Company granted the Bridge/DIP Lenders guarantees and liens from (a) previously unencumbered entities that sat above (i.e., were structurally junior to) the Bridge/DIP Lenders’ borrowers in the Company’s corporate structure and (b) previously unencumbered entities that sat between the Bridge/DIP Lenders’ borrowers and the solar power projects (i.e., were structurally senior to the Bridge/DIP Lenders and junior to project financing).”
We know we’re as ⚡ shocked ⚡ as the rest of you.
Of course, the bankruptcy has to happen fast too. Always with the “urgency.” To bend Judge Lopez to their whim and put pressure on the not-yet-appointed official committee of unsecured creditors, the debtors propose to close the sales to the bridge/DIP lenders on the following holiday-f******* … **breathe** … **ccccckkkkking timeline:
We knew Latham & Watkins LLP (“L&W”) brought on a lot of new people recently but did we miss The Grinch making his way into the mix? Did he also get 3x-$20mm, guaranteed?!?
Anyway, we suppose we need to talk about the DIP piece of the financing(s) package. The new money is ~$250.4mm (~$55.4mm interim), composed of an initially agreed $204mm, $40.2mm that went undrawn under the out-of-court financings, and, after L&W took a good, hard look at the company’s revised 13-week cash flow forecast, an incremental $5.8mm (to fund prof fees).*** That’s enough to make the cases last “fully” through … lol, January ‘26.
And H.O.L.Y. HELL is there a roll-up. On day one of the cases, the debtors asked to roll up $1,405mm in prepetition debt. L&W seriously walked into court and told the judge it was a ~2.8:1 roll-up.
To arrive at that figure, you have to (i) time travel back to a pre-“interim”-financing, early October filing date, at which point the bridge/DIP lenders would’ve been owed ~$1,173mm, and (ii) assume the same lenders would have provided a ~$419mm new money DIP, composed of (a) the $250.4mm in funding the debtors are getting under the actual bankruptcy DIP and (b) the $168mm in “pre-DIP DIP” cash they borrowed while on the cusp of bankruptcy (before they tacked on $63mm in fees). For the more visually inclined, here’s the equation:
But a pre-DIP DIP s … uh … prepetition debt and the debtors, naturally, wanted to roll the fees. Here’s the actual math:
So, at the November 10, 2025 first-day hearing, L&W’s Andrew Parlen tried to work his magic and butter up Judge Lopez before the ramrodding happened later on.
Except there wasn’t any buttering to be done. Here’s the colloquy, not even seven minutes into the hearing:
Mr. Parlen: I want to thank Your Honor for accommodating our schedule – I know we didn’t make it easy on Your Honor or your team – and also the U.S. Trustee for working with us through most of our issues today. Before getting into the agenda, Your Honor, we’d like, with your permission, to start with a slide deck that provides an overview of Pine Gate. And if possible, it would be helpful to have that control handed over to my colleague, Jonathan Gordon, who’s here on the line.
The court: Okay, all right, just give me one moment.
Mr. Parlen: Mm-hmm.
The court: Ah, there you are. That’s what I needed, Mr. Gordon. Thank you. Who’s got the DIP? That’s what I want to know. That’s the question. Let’s just get to it, ha.
Anyway, they got there eventually and … welllllllll, this about sums that up:
Yeah, he shot down “~2.8”:1 … but, wait, (a real) 3:1 was no problem. We mean, how could you not when L&W presented this strong, legal argument:
“It’s all – you could think of it, even though it’s not legally, you could think of it as one facility.”
So, on the first day of the cases, $753.8mm of prepetition debt … ~4.5x more than the entire pre-DIP DIP (excluding fees) … was converted into actual DIP financing.
We mean, why not? Judge Lopez’s only hang up is, L-O-L, due process. Because, at the same first-day hearing, the debtors were aiming to get bidding procedures approved, and each of the bridge/DIP lenders’ asset purchase agreement contained a $3mm expense reimbursement to be paid pro rata to it to the extent the court approved any “alternative transaction” aka a sale of some or all of the assets subject to each bridge/DIP lender’s bid.
Judge Lopez got absolutely caught up in how that proration works to the extent someone bids on some but not all of the assets subject to each stalking horse bid. Here’s Judge Lopez:
“I’m concerned about due process, which I don’t think there’s a price that you can put on.”
A seven hundred fifty-three million point eight million dollar rollup on day one causes no concern, but we’re caught up on a hypothetical splitting of, at most, $9mm?
Let us be clear, Judge: Ain’t. F*cking. No. One. Showing. Up. To. The. Auction.
And if we’re wrong, we are 100,000% certain the debtors will go with the collective, DIP-lender-approved bid as the “value-maximizing option”. That’s the easy path out. If due process were a real concern …
… Judge Lopez missed the mark by … we dunno … approximately $744.8mm.
But to pretend it is a real concern, he punted the expense reimbursement to tomorrow, November 17, 2025 at 2:30pm CT. Congrats to the bridge/DIP lenders on their forthcoming acquisitions, 🖕.
While on the topic of, LOL, due process, Ford Motor Credit Company LLC’s Amitkumar Sharma is keen on getting his. Since the hearing, he’s filed forty-four requests for notice on the docket.
Perhaps Judge Lopez will notice it and, you know, focus on … due process? Johnny can dream.
The debtors are represented by Latham & Watkins LLP (Ray Schrock, Andrew Parlen, Alexander Welch, Jason Gott, Jonathan Gordon) and Hunton Andrews Kurth LLP (Timothy “Tad” Davidson II, Philip Guffy, Brandon Bell) as legal counsel, Alvarez & Marsal North America, LLC (Mark Rajcevich) as financial advisor and CRO, and LAS as investment banker. William Transier, Neal Goldman, and Todd Arden compose the debtors’ special committee. BAM is represented by Paul, Weiss, Rifkind, Wharton & Garrison LLP (Brian Hermann, Bob Britton) and Porter Hedges LLP (John Higgins, Megan Young-John) as legal counsel. CG is represented by Milbank LLP (Tyson Lomazow, Andrew Harmeyer) and Haynes and Boone LLP (Ian Peck, Charles Beckham) as legal counsel. Fundamental is represented by Sidley Austin LLP (Duston McFaul, Maegan Quejada, and Ishani Patel) as legal counsel. Back Bay Solar, LLC, as JV partner, is represented by Greenberg Traurig, LLP (Julia Frost-Davies, Charlie Liu, Brian Greer, Karl Burrer, Kristen Jacobsen) as legal counsel. Healthcare of Ontario Pension Plan Trust Fund is represented by Weil, Gotshal & Manges LLP (Matthew Barr, Chase Bentley, Teddy Cohan, Gabe Morgan) as legal counsel. LPL Solar LLC is represented by Eversheds Sutherland (US) LLP (David Wender, Danielle Barav-Johnson) as legal counsel. Equity holders GC PGR HoldCo Member, LLC and GC PGR HoldCo, LLC are represented by Kirkland & Ellis LLP (Chris Marcus) as legal counsel.
*At its peak, the company had 1k+ employees, which, at its now, have dwindled to ~284.
**Each lender’s original loan and incremental loan live under the same credit agreement, so we assume they share a lien.
***The DIP carries interest at 14% PIK on the new money and the prepetition rate on the rolled up amounts (which was 14% PIK on the pre-DIP DIP) and features a 4% upfront fee on the new money, a 8% new money exit fee (reduced to 5% if the stalking horses prevail, which they will), and a prepayment premium resulting in a multiple on invested capital of 1.30x.
Company Professionals:
Legal: Latham & Watkins LLP (Ray Schrock, Andrew Parlen, Alexander Welch, Jason Gott, Jonathan Gordon) and Hunton Andrews Kurth LLP (Timothy “Tad” Davidson II, Philip Guffy, Brandon Bell)
Financial Advisor and CRO: Alvarez & Marsal North America, LLC (Mark Rajcevich)
Investment Banker: Lazard Frères & Co. LLC ($LAZ) (Tyler Cowan)
Special Committee: William Transier, Neal Goldman, Todd Arden
Claims Agent: Omni (Click here for free docket access)
Other Parties in Interest:
Prepetition and DIP Lender and Stalking Horse: Brookfield Asset Management ($BAM) (via BID Administrator LLC)
Legal: Paul, Weiss, Rifkind, Wharton & Garrison LLP (Brian Hermann, Bob Britton) and Porter Hedges LLP (John Higgins, Megan Young-John)
Prepetition and DIP Lender and Stalking Horse: The Carlyle Group ($CG) (via Carlyle Global Credit Investment Management L.L.C.)
Legal: Milbank LLP (Tyson Lomazow, Andrew Harmeyer) and Haynes and Boone LLP (Ian Peck, Charles Beckham)
Prepetition and DIP Lender and Stalking: Fundamental Renewables (via FP Solar Development I LLC)
Legal: Sidley Austin LLP (Duston McFaul, Maegan Quejada, and Ishani Patel)
JV Partner: Back Bay Solar, LLC
Legal: Greenberg Traurig, LLP (Julia Frost-Davies, Charlie Liu, Brian Greer, Karl Burrer, Kristen Jacobsen)
Party in Interest: Healthcare of Ontario Pension Plan Trust Fund
Legal: Weil, Gotshal & Manges LLP (Matthew Barr, Chase Bentley, Teddy Cohan, Gabe Morgan)
Party in Interest: LPL Solar LLC
Legal: Eversheds Sutherland (US) LLP (David Wender, Danielle Barav-Johnson)
Equity: GC PGR HoldCo Member, LLC and GC PGR HoldCo, LLC
Legal: Kirkland & Ellis LLP (Chris Marcus)