A Texas bankruptcy judge on Thursday approved Mosaic Sustainable Finance Corp.’s Chapter 11 reorganization plan, clearing the way for the residential solar financing firm to transfer control of its loan servicing arm to its secured lender after a failed auction drew no bidders.
U.S. Bankruptcy Judge Chris Lopez said the plan represented the best possible outcome under the circumstances, even as he acknowledged the disappointment. “I don’t think anyone leaves the room high-fiving, but I cannot think of what more the debtors and each of their professionals could have done,” he told the parties.
From Auction to Debt-for-Equity Swap
Mosaic had initially sought to sell its assets through a Chapter 11 auction after filing in June with more than $264 million in debt, but with no acceptable offers, the company pivoted. The revised plan hands ownership of the reorganized loan servicing business to its debtor-in-possession lender, Fulbright Bank, through a debt-for-equity swap, while winding down Mosaic’s installation operations.
The plan also preserves customer rights to pursue claims tied to faulty solar panel installations against third parties, including lenders who purchased Mosaic-originated loans.
