Amid Financial Struggles and Misconduct Allegations, SunPower Files for Bankruptcy

SunPower, a prominent rooftop solar installer, filed for bankruptcy after months of financial struggles exacerbated by high interest rates and allegations of misconduct in its reporting practices. The company’s stock plummeted by nearly 44% on Tuesday, closing at 45 cents per share, marking a significant decline of over 90% this year.

The bankruptcy filing in the U.S. Bankruptcy Court for the District of Delaware listed SunPower’s assets and liabilities between $1 billion and $10 billion. TotalEnergies remains the largest stakeholder in SunPower.

As part of its restructuring plan, SunPower announced the sale of its Blue Raven Solar and new home businesses, along with its non-installing dealer network, to Complete Solaria for $45 million, pending court approval.

The company aims to have this sale approved by mid-September. Additionally, SunPower intends to liquidate its remaining assets through the bankruptcy process. This move follows the company’s halt on new leases, product shipments, and installations, which caused its stock to drop below $1 in July.

The residential solar sector has faced significant challenges due to high interest rates, which have reduced demand and left companies with excess inventory. However, SunPower’s troubles were compounded by allegations of misconduct in its financial reporting practices.

The U.S. Securities and Exchange Commission (SEC) subpoenaed the company in February for documents related to its revenue recognition practices in quarterly reports from 2023.

The situation worsened when SunPower’s independent accountant, Ernst & Young, resigned in June, refusing to associate with the company’s financial statements. Ernst & Young cited allegations that senior management was involved in misconduct related to financial statements as the reason for their resignation. This added to the company’s credibility issues and further pressured its stock.

In December, SunPower breached a credit agreement and issued a warning about its ability to continue operations, citing “substantial doubt” about its future. The combination of financial difficulties, legal challenges, and loss of confidence from key stakeholders led to SunPower’s decision to file for bankruptcy, aiming to navigate through its turbulent times by restructuring and liquidating assets.