Red Rose & PetersenDean

DEBTORS AND THEIR BUSINESSES

The Debtors include the following companies that provide residential and commercial solar panel installation, roofing, fencing, battery systems, and HVAC services:

• Beachhead Roofing & Supply, Inc.;
• California Equipment Leasing Association, Inc.;
• Fences 4 America, Inc.;
• James Petersen Industries, Inc.;
• PD Solar, Inc.;
• Petersen Roofing and Solar LLC;
• Petersen-Dean, Inc.;
• PetersenDean Hawaii LLC;
• PetersenDean Roofing and Solar Systems, Inc.;
• PetersenDean Texas, Inc.;
• Red Rose, Inc.;
• Roofs 4 America, Inc.;
• Solar 4 America, Inc.;
• Sonoma Roofing Services, Inc.;
• TD Venture Fund, LLC; and
• Tri-Valley Supply, Inc.

FINANCIAL INFORMATION WILL BE PROVIDED

When they filed for bankruptcy, the Debtors indicated that they did not believe that they would have sufficient cash flow to pay unsecured creditors anything through their bankruptcy proceeding. At the same time, the Debtors indicated that they have at least $25 million in trade debt.

Right now, the Debtors have a deadline of June 25th to provide detailed financial information, but due to the size and complexity of the Debtors’ companies, they have asked the Court to extend that deadline by approximately two weeks. The Court will probably grant the Debtors’ requested extension, so creditors will have to wait a little longer to find out the state of the Debtors’ finances.

Questions creditors should ask include:

1. Additional details about the pre-petition firing of the Debtors’ former President and certain managers.
2. Whether the Debtors have transferred substantial money or other assets to insiders that may be recoverable to pay creditors.
3. How the Debtors are planning to use the funds they will receive from the ~15,500 projects they have pending and why those funds can’t be used to repay creditors.

SECURED CREDITORS WILL ADVOCATE AGAINST UNSECURED CREDITORS

In a declaration filed by the Debtors’ Chief Restructuring Officer, Jeffrey Perea, describing the history of the Debtors and why they filed for bankruptcy, Mr. Perea describes a profitable enterprise that has been involved in endless disputes with its primary secured creditor. He also describes substantial litigation that the Debtors are involved in with individuals who have failed to pay for services the Debtors provide. The secured creditor, ACF Finco I LP, is currently owed approximately $27.4 million.

The Debtors have laid out their intentions to spend all of their available money to repay ACF and to pay attorneys to represent them in their multiple court cases. If unsecured creditors hope to be repaid, they will need to have a strong voice in these cases. Forming a committee of unsecured creditors is the most reliable way to get a Court and Debtors to listen to unsecured creditors.

In Chapter 11 cases, the quiet ones are often forgotten. Those who raise a fuss and make their voices heard are the ones who typically come out ahead. ACF will certainly be loud about its need for repayment. Unsecured creditors must make their voices heard, too.