iSun: One-Bidder 363 Sale Ends in Chapter 7
iSun filed chapter 11 in Delaware in June 2024 with a DIP from Clean Royalties and pursued a stalking-horse 363 sale with no competing qualified bids. The sale closed in August 2024, and the case later converted to chapter 7 in January 2025.
iSun’s bankruptcy moved quickly from a liquidity crisis to a court-supervised going-concern sale, making it a compact case study in how a solar services platform can fail when (i) sales slow, (ii) customer financing becomes harder, and (iii) the capital structure is too thin to absorb sustained operating losses. The company — a Vermont-headquartered solar services and infrastructure deployment business and the parent of residential installer SunCommon — filed chapter 11 petitions on June 3, 2024 as it pursued a sale of substantially all assets. iSun was described as a major Vermont solar installer and was delisted from NASDAQ around the same period.
Bankruptcy filings describe a debtor group of 12 entities, a high-cost debtor-in-possession (DIP) facility tied to sale milestones, a stalking-horse-driven 363 sale process that produced no competing qualified bids, and a post-sale plan framework that attempted to govern residual litigation and claims administration through a liquidation trust before the case ultimately converted to chapter 7. Public reporting and press releases indicate the sale closed on August 26, 2024 and the business was rolled into Original Clean Energy, which publicly described acquiring iSun and SunCommon and installing new leadership.
This case also illustrates a point that often gets lost in “energy transition” narratives: installer businesses are not “pure plays” on the cost curve of solar modules; they are finance-dependent service platforms. Reporting tied iSun’s distress to higher interest rates and slumping demand, which matters because residential solar purchasing is frequently driven by consumer financing and monthly payment comparisons. Local reporting similarly described leadership statements that higher rates harmed demand. Bankruptcy filings similarly described interest-rate pressure, an inability to raise incremental capital, and a prepetition default notice that eliminated remaining runway .
| Debtors | iSun, Inc. and 11 subsidiaries (12 debtor entities total) |
| Court | U.S. Bankruptcy Court, District of Delaware |
| Lead case number | 24-11144 (TMH) |
| Judge | Thomas M. Horan |
| Petition date | 2024-06-03 |
| Headquarters as described in bankruptcy filings | Williston, Vermont |
| Business (high level) | Solar services and infrastructure deployment across residential and C&I segments |
| Immediate restructuring path | DIP-funded going-concern 363 sale process |
| DIP lender | Clean Royalties, LLC |
| Stalking horse / buyer | Clean Royalties, LLC |
| Stalking horse headline price as described in bankruptcy filings | $10.0 million plus assumed liabilities plus cure payments |
| Auction outcome | Auction canceled due to no competing qualified bids |
| Sale closing (reported) | 2024-08-26 |
| Post-sale posture | Modified liquidation plan filed; later chapter 7 conversion |
| Claims and noticing agent | Epiq Corporate Restructuring, LLC (bankruptcy filings) |
DIP-Funded 363 Sale, Liquidation Trust Proposal, and Chapter 7 Conversion
Business model and why this wasn’t a “project finance” bankruptcy. Bankruptcy filings describe iSun as a solar energy services and infrastructure deployment company spanning residential solar (through SunCommon and related brands) and commercial/industrial work, with service lines including design and development, engineering/procurement/installation, operations and maintenance, storage, and EV infrastructure . That business model creates a distinctive distress profile compared to a utility-scale developer or a module manufacturer: installers and integrators carry meaningful labor and project execution obligations, often rely on consumer or third-party financing pipelines, and can experience rapid revenue contraction when financing rates rise and sales cycles lengthen. Industry coverage described iSun as a New England installer seeking chapter 11 protection and a sale process.
Acquiring growth and then absorbing the downside. iSun’s scale narrative was built partly through acquisitions. The company announced in 2021 that it completed the acquisition of SunCommon in a transaction valued at $40 million, with contemporaneous Vermont reporting describing the SunCommon acquisition. Local coverage described SunCommon as a high-profile residential solar brand and framed the bankruptcy as iSun’s failure as the parent company, not necessarily the end of SunCommon’s operating platform, with later reporting describing SunCommon continuing separately.
This history matters in bankruptcy because acquisitions are often financed with a mix of cash, stock, and assumptions about synergies and scaling fixed costs. If the market environment shifts (financing costs, consumer demand, labor availability), the combined platform can be stuck with integration expenses and overhead that are difficult to cut quickly without harming revenue production.
Distress drivers described in filings: losses, weekly cash deficit, and a hard default date. Bankruptcy filings describe sustained losses and an operating deficit severe enough to make time the controlling variable. Filings reported net losses of $53.8 million in 2022 and $19.4 million in 2023, and they forecast a 2024 loss of approximately $10 million. They also described a weekly operating deficit of roughly $250,000 at filing . The filings then connected the liquidity crisis to financing constraints and to interest rate pressure that increased cost of capital and reduced financed residential demand . Local reporting reinforced the same “rate shock” framing, describing leadership statements that the company was on the precipice of shutting down and that higher rates harmed demand.
Filings also describe a specific default trigger: an event of default notice under the Decathlon loan on May 9, 2024 that demanded immediate payment . In a cash-burn case, a hard default date can compress strategic alternatives because it changes creditor remedies, accelerates potential litigation, and can freeze counterparties and customers who fear disruption to project performance.
Capital Structure and DIP Financing
Capital structure and obligation profile: small funded debt, large operational liabilities. A key analytical point in this case is that iSun’s “headline” long-term debt number was not enormous relative to many chapter 11 debtors, but the company still failed due to operating losses and a broader liability stack. Bankruptcy filings describe total long-term debt of approximately $9.8 million as of December 31, 2023 (including an $8.0 million Decathlon revenue loan and other smaller term/vehicle loans), while also describing approximately $34.3 million of trade debt, contract liabilities, and lease liabilities . This is a common pattern in installer and contractor bankruptcies: trade and contract obligations can dwarf funded debt because project execution and vendor networks create large payables and disputed claims when work slows or stops.
The following table is a “restructuring lens” view of the obligations described in filings: it separates funded debt from operational liabilities and highlights why a lender default can still produce a liquidity cliff even with modest funded principal.
| Obligation category as described in bankruptcy filings | Selected amounts | Why it matters for restructuring |
|---|---|---|
| Funded debt (long-term) | ~$9.8M total | Provides the secured creditor control plane and default remedies |
| Decathlon revenue loan | $8.0M principal | Primary secured lender; default created a hard deadline |
| Other funded items | Vehicle loans ~$1.2M; NBT term loans ~$1.13M | Typical equipment financing; often resolved via surrender or negotiated payoff |
| Merchant cash advances | Several MCA balances described | MCAs can be operationally disruptive due to daily remittance structures |
| Trade / contract / lease liabilities | ~$34.3M | The “real” claims population in an installer bankruptcy; drives disputes and cure/assumption fights |
The claims/noticing infrastructure: why Epiq matters in a fast sale. Bankruptcy filings authorized Epiq Corporate Restructuring, LLC as claims and noticing agent effective as of the petition date, including maintaining the official claims register, processing proofs of claim, serving notices, and providing public access to claims data via a case website . In a case that moves quickly to a 363 sale and then to conversion, the claims agent’s role is less about long-term distribution and more about making sure due process is defensible while the debtor sells the operating business and sheds liabilities free and clear.
DIP financing: a small facility with punitive economics because time was short. The DIP facility described in filings is small in absolute dollars but expensive in pricing and fees, reflecting (i) the lack of unencumbered collateral value, (ii) the urgency of funding payroll and projects during a sale process, and (iii) the credit risk that a going-concern sale might fail. Bankruptcy filings describe a $4.0 million superpriority senior secured term loan facility, including approximately $1.0 million of rolled bridge loans and $3.0 million of new money split between a $2.0 million initial draw and a $1.0 million final draw . The DIP pricing described in filings was SOFR + 18% paid-in-kind, plus a 1.0% arrangement fee, a 4.0% commitment fee, and tiered exit fees escalating up to 9% on amounts above the first $3 million .
To put that into an operational frame: PIK interest and large upfront fees are not “free money” in a liquidation-driven case; they are a tax on time. The more weeks the process runs, the more the DIP claims swell and the less is available for any junior constituency. That is why DIP facilities in fast sales are often paired with tight budgets and explicit milestones that trigger defaults if the sale drifts .
| DIP term as described in bankruptcy filings | iSun case terms | Practical implications |
|---|---|---|
| Total DIP facility | $4.0M | Small absolute runway; sale process must be executable |
| Rolled bridge loans | ~$1.0M roll-in | Converts prepetition rescue into superpriority DIP status |
| New money | $3.0M (split $2.0M interim / $1.0M final) | Conditions funding on court approval and compliance |
| Interest | SOFR + 18%, PIK | High effective cost; increases DIP claim even without cash pay |
| Upfront fees | 1.0% arrangement; 4.0% commitment (earned at closing) | Front-loads cost; reduces net proceeds available to estate |
| Exit fees | Tiered 3% / 6% / 9% | Makes refinancing or delay expensive; pushes toward rapid sale close |
| Budget + milestones | 13-week budget; sale milestones tied to defaults | Makes the DIP a governance device as much as a funding source |
363 Sale Process and Sale Order
Who funded the DIP and why affiliation matters. Bankruptcy filings identify Clean Royalties, LLC as DIP lender . In sale-driven chapter 11 cases where the DIP lender is also the stalking horse buyer (or an affiliate), professionals watch two things: (i) whether the marketing process still produces a credible market check and (ii) whether bid protections and milestones effectively lock in a single outcome. The iSun docket reflects a process in which Clean Royalties served as stalking horse and later buyer, and a notice states the auction was canceled because no qualified competing bids were received . That outcome increases the importance of the court’s findings about process integrity and good faith in the sale order.
The sale motion: economic terms and the “floor bid” construct. Bankruptcy filings described a stalking horse transaction in which Clean Royalties offered aggregate consideration described as $10.0 million plus assumed liabilities plus cure payments, with bid protections including a 5% break-up fee (based on an alternate proposal purchase price) and up to $250,000 of expense reimbursement . The motion also described overbid mechanics: an initial overbid threshold of at least $1.0 million above the stalking horse value and successive bid increments of $250,000 .
This is an important distinction for practitioners: the “$10 million” figure is not necessarily a pure cash price. In many contractor/install cases, purchase price includes a blend of cash, assumed obligations, cure payments, and debt application. The sale order later clarifies how purchase price is satisfied in this specific case, which is why the sale order is the document that really matters for valuation and recovery analysis .
Court-approved sale schedule: bid deadline, auction date, and sale hearing. The bidding procedures order anchored the sale timeline with a bid deadline of July 22, 2024 at 4:00 p.m. Eastern Time, an auction date of July 24, 2024 at 10:00 a.m. Eastern Time (if needed), and a sale hearing on July 30, 2024 at 2:00 p.m. Eastern Time, along with related objection deadlines . A later notice stated the auction was canceled because no qualified competing bids were received or expected by the bid deadline and that the stalking horse bidder was designated the successful bidder .
Local reporting described this as effectively a one-bidder sale, which is consistent with the bankruptcy notice of auction cancellation, and framed the court as clearing a sale for $10 million.
Sale order: free-and-clear findings, good faith, and purchase price mechanics. The sale order approved a sale of the debtors’ assets to Clean Royalties, LLC free and clear of liens and other interests under section 363(f) and included good-faith purchaser findings under section 363(m) . It also described the most analytically important item for recoveries: the purchase price was deemed satisfied by a dollar-for-dollar application of DIP obligations (other than a specified “Tranche 4” of DIP obligations), with that Tranche 4 assumed by the purchaser .
This structure changes how professionals should interpret the sale:
- The transaction functions partly as a “DIP-to-own” outcome. If the buyer can satisfy purchase price by applying DIP debt, then a portion of the “price” is effectively being paid by converting lender exposure into ownership of assets.
- Junior recoveries become even less likely absent surplus cash. When purchase consideration is paid by debt application rather than new cash, there is typically less residual cash entering the estate for administrative costs and unsecured creditors.
- The free-and-clear order becomes the primary liability boundary. For operating buyers, the sale order’s findings and assumed obligations schedules often determine what liabilities the buyer is taking versus leaving behind.
Post-sale branding and operating continuity: Original Clean Energy. In September 2024, a press release stated that “Original Clean Energy” acquired iSun and SunCommon and that the sale closed on August 26, 2024. Vermont coverage likewise described Original Clean Energy acquiring iSun, including the SunCommon and Liberty Electric brands, with post-sale rebranding notes. For bankruptcy analysis, the relevant takeaway is not the marketing language but the observable implication: the operating platform continued under new ownership, consistent with the purpose of a going-concern sale.
What makes the iSun outcome analytically interesting is that it appears to be a “two-step” continuity story: (i) the operating assets were transferred in a 363 sale and then surfaced publicly as part of Original Clean Energy, while (ii) the residual corporate shell and remaining estate claims proceeded through plan drafting and then conversion. That split is a common pattern in middle-market sale cases: the buyer acquires the revenue-producing platform (contracts, workforce, brand, and some liabilities), while the bankruptcy estate retains disputed claims, intercompany entanglements, and litigation rights that are too uncertain to cleanly price in a purchase agreement.
There is also a local “brand continuity” element that matters in solar services: SunCommon’s market presence is customer-facing, and post-sale communications emphasized continuation rather than a shutdown, including messaging tied to the acquisition and local reporting describing SunCommon continuing. In practice, that kind of messaging helps preserve pipeline value — a critical point for installers whose future cash flows depend on customer trust and on third-party financing relationships.
Case timeline: how quickly the case moved from default notice to sale closing. The filings and reporting show a compressed path from lender default to filing, and then from filing to an auction that was canceled due to a lack of competing bids. This timeline is valuable for practitioners because it illustrates what “runway-driven” cases look like in the docket: DIP approval, bidding procedures, and sale order milestones become the core restructuring, with plan work happening after the operating platform has already changed hands.
| Date | Milestone | Source anchor |
|---|---|---|
| 2021-10 | iSun completed its acquisition of SunCommon (transaction described as $40M) | $40M |
| 2024-05-09 | Event of default notice under Decathlon loan (demand for immediate payment) | bankruptcy filings |
| 2024-05-23 | NASDAQ suspended trading in preparation for delisting as described in bankruptcy filings | bankruptcy filings |
| 2024-06-03 | Chapter 11 petition date | 2024-06-03 |
| 2024-07-22 | Bid deadline (court-approved) | bankruptcy filings |
| 2024-07-24 | Scheduled auction; later canceled due to lack of qualified bids | bankruptcy filings |
| 2024-07-30 | Sale hearing (court-approved schedule) | bankruptcy filings |
| 2024-08-23 | Sale order entered | bankruptcy filings |
| 2024-08-26 | Sale closed (reported) | 2024-08-26 |
| 2025-01-27 | Conversion to chapter 7 (effective immediately upon entry) | bankruptcy filings |
What the one-bidder outcome likely reflects (without over-reading it). A canceled auction does not automatically mean the process was flawed; bankruptcy filings state the auction was canceled because no competing qualified bids were received by the bid deadline . But it does provide information about market appetite at the time. For installers, “value” is often project pipeline quality, the financing partner network, and the ability to maintain customer trust while assuming selected liabilities. In a high-rate environment, those elements can be harder to underwrite quickly, especially when the business is burning cash and when diligence timelines are compressed by DIP milestones. That context is consistent with industry commentary on 2024 solar bankruptcies and with post-sale reporting describing the Original Clean Energy acquisition of iSun and SunCommon.
Liquidation Plan and Chapter 7 Conversion
A liquidation trust plan was proposed after the sale (and why that step exists). After a going-concern sale closes, debtors often still need a chapter 11 plan (or a structured dismissal) to wind down remaining assets, resolve claims, and prosecute estate causes of action. Bankruptcy filings show iSun pursued a modified joint plan of liquidation establishing a liquidation trust and two classes of beneficial trust interests — Class A and Class B — with retained causes of action transferred to the trust for administration . The plan also defined a Decathlon Trust Funding Amount of $350,000 carved out from sale proceeds otherwise distributable to Decathlon on account of its secured claim, to be held in express trust under referenced deal documents .
The presence of a defined “trust funding amount” is a signal that the sale process included negotiated governance or dispute-resolution mechanics with the secured lender. In many middle-market cases, the plan’s real role is to create a controlled forum for litigation and claims reconciliation, rather than to restructure operations (which have already been sold).
How the plan proposed to prioritize trust distributions (Class A vs. Class B). Bankruptcy filings describe a two-tier beneficial interest structure, which is a common pattern when creditors have different negotiated priorities and when the estate expects limited residual cash beyond administrative reserves. The plan’s structure can be summarized as follows at a high level , using terminology intended to be operational rather than purely legal:
| Stakeholder bucket (high level) | Plan distribution instrument (high level) | What drives recovery in practice |
|---|---|---|
| Senior secured lender and related deficiency claims | Liquidation trust beneficial interests + express trust funding amount | Residual cash, claims resolution outcomes, and litigation recoveries after sale |
| General unsecured creditors | Liquidation trust beneficial interests | Primarily avoidance actions and any surplus after satisfying negotiated priorities |
| Equity | No distribution in a liquidation plan after a lender-governed sale | Typically out-of-the-money in sale-driven cases |
Conversion to chapter 7: when the case moves from “plan governance” to “trustee liquidation.” Bankruptcy filings show the case was converted from chapter 11 to chapter 7 by order entered January 27, 2025, effective immediately upon entry . Vermont reporting later framed the chapter 7 conversion as a shift to liquidation and described SunCommon continuing separately, emphasizing that the operating business had already moved to new ownership.
Conversion matters for stakeholders because it changes who controls remaining litigation and asset administration. In chapter 7, a trustee becomes the central decision-maker for pursuing claims, resolving disputes, and distributing any residual value. It also typically slows the pace relative to a “milestone-driven” chapter 11 sale case, because the process shifts from deal execution to estate administration. Bankruptcy filings also reflect that conversion orders can address practical clean-up issues, including allocation of remaining carve-out funds and the end of the chapter 11 claims/noticing agent’s role .
Key Professionals and Case Context
Key professionals: why this case had a CRO and a banker even at small scale. Bankruptcy filings show the debtors retained a CRO (Novo Advisors, LLC) and a financial advisor/investment banker (England Securities, LLC) effective as of the petition date . This is a recognizable pattern in time-compressed mid-market cases: a CRO provides operational triage and credibility with lenders and buyers, while a banker provides a structured market check and the transaction “rails” (marketing materials, buyer outreach, and execution discipline). England’s engagement was framed publicly as exclusive financial advisor work in the chapter 11 sale process. Committee-side professionals were also retained, including Seward & Kissel as committee counsel, Dundon Advisers as committee financial advisor, and Benesch as committee Delaware counsel . Even when outcomes appear pre-ordained, committee professionals can still influence process integrity, sale order terms, and the scope of post-sale litigation claims.
Why this case fits into a broader 2024 solar distress pattern. Industry commentary grouped iSun among solar-related bankruptcies that “flared up” in 2024, reflecting how financing costs and demand softness affected parts of the ecosystem. The same commentary described installer and services platforms as particularly rate-sensitive because demand is frequently driven by consumer financing and monthly payment comparisons.
Allegations during the case: governance and oversight context. Public radio reporting described whistleblower allegations of misappropriated funds during the bankruptcy proceedings.
Frequently Asked Questions
When did iSun file for chapter 11 bankruptcy and where was the case filed?
iSun filed chapter 11 petitions on June 3, 2024 in the U.S. Bankruptcy Court for the District of Delaware. Local reporting described iSun as a major Vermont solar installer and framed the filing as a significant event for the parent company of SunCommon.
Why did iSun file for chapter 11 (what did filings cite as the main drivers)?
Bankruptcy filings described sustained losses, an operating deficit, an inability to raise additional capital, and macro pressure from higher interest rates that increased cost of capital and depressed financed residential demand . Filings also described a May 9, 2024 event of default notice under the Decathlon loan that demanded immediate payment and tightened the timeline for alternatives .
How much money was iSun losing and what did filings say about cash burn?
Bankruptcy filings reported net losses of $53.8 million in 2022 and $19.4 million in 2023, and they forecast a 2024 loss of roughly $10 million. They also described an operating deficit of approximately $250,000 per week at filing . Local reporting repeated the weekly burn framing.
What happened to iSun’s NASDAQ listing?
Bankruptcy filings described iSun’s shares being listed on NASDAQ under “ISUN” and stated NASDAQ suspended trading on May 23, 2024 in preparation for delisting, with the stock trading over the counter at $0.08 per share as of the petition date . An investor disclosure summary described the delisting notice and continued listing rule issues.
What were iSun’s DIP financing terms and why was it considered expensive?
Bankruptcy filings described a $4.0 million DIP facility with SOFR + 18% paid-in-kind interest, significant upfront fees (including a commitment fee), and tiered exit fees that escalated with principal amount . In sale-driven cases, that structure is “expensive” because it increases the DIP claim quickly and reduces residual estate value if the process runs long.
Who was the stalking horse bidder and ultimate buyer in iSun’s 363 sale?
Bankruptcy filings describe Clean Royalties, LLC as stalking horse bidder and purchaser under the sale order . Local reporting likewise described Clean Royalties as the buyer and connected it to the $10 million headline price.
How was the $10 million purchase price structured, and how did the DIP apply against it?
Bankruptcy filings describe the sale consideration as a combination of headline value plus assumed liabilities and cure payments, and the sale order states the purchase price was deemed satisfied by a dollar-for-dollar application of DIP obligations (other than a specified tranche assumed by the purchaser) . This is why sale-driven chapter 11 outcomes can look like “cash prices” externally while functioning internally as debt application and assumption mechanics.
What did the liquidation plan propose before the chapter 7 conversion?
Bankruptcy filings describe a modified liquidation plan establishing a liquidation trust and Class A and Class B beneficial trust interests, with retained causes of action transferred to the trust for prosecution or settlement . The plan also defined a $350,000 Decathlon Trust Funding Amount carved out from sale proceeds otherwise distributable to Decathlon on account of its secured claim .
When was the case converted to chapter 7, and what happens after conversion?
Bankruptcy filings show the cases were converted to chapter 7 by order entered January 27, 2025, effective immediately upon entry . After conversion, a chapter 7 trustee administers remaining assets and litigation claims in a liquidation framework, and local reporting described the chapter 7 conversion and SunCommon continuing separately after the sale.
Who is the claims agent, and how do I file a proof of claim?
Bankruptcy filings identify Epiq Corporate Restructuring, LLC as the claims and noticing agent for the chapter 11 cases . Claimants should follow the official notices and instructions issued in the iSun cases, including filing a separate proof of claim in each debtor case against which a claim is asserted and meeting any court-ordered deadlines (do not rely on third-party docket sites).
For more analysis of chapter 11 cases and restructuring developments, explore the ElevenFlo blog.
