Brown Rudnick Advises Beacon Power Corporation on Sale of Assets in Bankruptcy to Rockland Capital
PUBLISHED ON: 03/02/2012
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The Federal Energy Regulatory Commission Approves Sale
(BOSTON) March 2, 2012 - - Brown Rudnick LLP advised Beacon Power Corporation of Tyngsboro, Massachusetts which today received Federal Energy Regulatory Commission approval for the sale of substantially all of Beacon Power’s assets to a unit of Rockland Capital. The terms of the sale, which is expected to close next week, include $5.5 million in cash and a promissory note in the amount of $25 million payable to the United States Department of Energy (DOE), along with additional guarantees and funding obligations to DOE of $6.6 million. Proceeds of the sale will repay approximately 70% of a DOE loan to Beacon Power.
Beacon Power, which makes flywheel energy storage systems, had filed for bankruptcy protection last fall. On February 7, 2012, a Delaware bankruptcy court judge approved the sale to a unit of Rockland Capital which was the winning bidder at auction for substantially all of Beacon Power’s assets, including a 20-megawatt flywheel energy storage plant in Stephentown, New York.
Rockland Capital is a leading national private equity firm focused on companies in the North American power sector. Rockland Capital has announced its intention to continue to operate Beacon in place and to continue to employ most of its employees.
Brown Rudnick and financial advisor CRG Partners Group LLC advised Beacon Power under a contingency fee arrangement, an accommodation almost unheard of in the bankruptcy world on behalf of a debtor company. Only if Beacon Power could be successfully sold in a successful reorganization process would the firms take their fees.
“We are very pleased with this successful outcome, and that Beacon Power survives as an operating energy company,” said Brown Rudnick partner William Baldiga. “We immediately recognized that by offering our client an alternative fee arrangement, Beacon Power could retain their employees, maintain their business and avoid the scenario where Company assets would be auctioned off, similar to those of bankrupt solar panel maker Solyndra. We knew that Beacon had high value in the market if it could be sold in an orderly manner, and Brown Rudnick and CRG made the decision to stand side by side with an important client."
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