June 22, 2026 - A&P, iSun, Freedom Forever

This episode covers key developments in three major restructuring and bankruptcy cases:

In the long-running A&P bankruptcy, a New York court issues a series of rulings that reduce a $68 million preference recovery effort to just $3.3 million, drawing a sharp line between routine commercial payments protected by Bankruptcy Code defenses and transfers tainted by creditor pressure, altered payment methods, or stay violations.

A Delaware bankruptcy court enforces a Section 363 sale order in the iSun case, rejecting an attempt to invalidate a solar asset sale based on a missing signature page and reaffirming that sale orders and purchase agreements must be interpreted as a unified transaction rather than through isolated drafting errors.

And Freedom Forever, one of the nation’s largest residential solar installers, seeks approval for an accelerated “Project Sunshine” sale process, racing against tax credit deadlines, debt maturities, and the potential erosion of its dealer network as it markets the business without a stalking horse bidder.

💡 From preference litigation and contract interpretation to distressed renewable energy transactions, this episode examines how courts are balancing procedural rigor, asset value preservation, and creditor recoveries in some of today’s most closely watched Chapter 11 cases.

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Transcript

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Welcome to Stretto's Restructuring Report, a podcast featuring notable stories curated by professionals and powered by Stretto Intelligence. Join us each week for the highlights, updates, and news impacting restructuring professionals. Want to go deeper than the headlines? Research Suite by Stretto lets you search across every jurisdiction in one place, with AI summaries cited directly to the docket so you can find, review, and understand the information that matters most. Try the Essential Plan free at researchsuite.stretto.com. Story 1. AP V McKesson, 68 million sought, 3 million recovered. On June 17th, Judge Lisa Beckerman of the Southern District of New York issued four memorandum opinions in the long-running Chapter 11 case of the Great Atlantic and Pacific Tea Company, the grocery chain known as AP. The opinions close out three lawsuits the Unsecured Creditors Committee filed back in 2017 against McKesson Corporation and two of its subsidiaries, following a seven-day trial in the summer of 2024. Here is the number that frames the whole story. The committee tried to claw back roughly $68 million in payments A and P made to the McKesson entities in the 90 days before its 2015 bankruptcy filing. But the bankruptcy code gives creditors several defenses that let them keep payments they received in that window. And after those defenses ran their course, the estate recovered only about $3.3 million. That is under $0.50 on every dollar the committee pursued. The gap comes down to one clean distinction. Where payments were mechanical and routine, the defense held. Where a creditor reached in and changed the terms, the defense failed. AP was so deeply insolvent that one element of the preference test decided itself because McKesson would have collected nothing on its unsecured claims in a liquidation. So the entire fight shifted onto the defenses. Against the parent company, the committee challenged 30 payments. 25 of them were recurring automated transfers, made on their exact due dates over a three-year relationship. Those were protected as ordinary course, and they accounted for about $59 million. Another group of next day payments was protected because the supply contract itself authorized McKesson to tighten credit terms when A and P's finances deteriorated. Only one payment survived as recoverable, a single wire transfer of about $4.6 million. It was perfectly timely, but the creditor had demanded that A and P switch from its standard method to a wire. The change in method is what defeated the defense. The two subsidiaries fared worse. Their ordinary course defenses failed completely, undone by irregular billing, undisclosed data, and threats to cut off goods and software. The court also found a willful violation of the automatic stay when McKesson reversed a rebate it had already paid. The central lesson runs through every ruling. Keep payments mechanical and they survive. Let creditor pressure or a non-standard channel touch them, and they do not. Story 2: The seller that wasn't, a Delaware court enforces a sale order. A Delaware court has enforced a Section 363 sale after a contract counterparty argued that one of the sellers was never actually a seller at all. The case is INRI ISUN, a solar company whose assets were sold in August of 2024 to a buyer called Clean Royalties, free and clear of all interests. The sale conveyed the receivables of every debtor, including a subsidiary, iSun Industrial, that held the great bulk of them, plus three named construction contracts for solar projects in Vermont. Here is the wrinkle. The cover page of the purchase agreement described the sellers broadly, but a narrower definition tied the term sellers to the entities listed on the signature page, and the unsigned signature pages attached to the court-approved version left iSun Industrial off. No one noticed at the time. The deal closed and everyone moved on. Nearly a year later, the omission became a strategy. When Clean Royalties sued the Vermont counterparties to collect, their lawyers discovered the gap while preparing counterclaims. From that one missing signature page, they built a simple argument. iSun Industrial sold nothing, so Clean Royalties owns nothing. On June 16th, Judge Thomas Horan rejected that reading and granted the motion to enforce the sale order. His reasoning is a clinic in how courts construe these documents. A sale order and the purchase agreement it approves are read together as a single instrument, and you do not decide a case off one page in isolation. Schedules conveyed the receivables of all the debtors. The contracts were listed by name, and ISUN Industrial was the only debtor party to them. The order authorized all the debtors to sell. Reading ISUN Industrial out would have erased the very consideration that made the sale possible. The court also rejected a due process complaint, noting the counterparties had monitored the docket closely, emailed the buyer the day after the order was entered, and then negotiated over these very receivables for a month, all on the shared understanding that clean royalties now own them. One important limit a free and clear sale extinguishes affirmative claims, so the counterparties cannot pursue money damages against the buyer. But recoupment is a defense, not an interest, and it survives the sale. The buyer won the question of ownership. What the receivables are actually worth still heads to Vermont. Story 3. Project Sunshine Freedom Forever pivots from survival to sale. Two months after a sharp downturn in solar financing pushed one of the nation's largest residential solar installers into Chapter 11, the debtors in INRI Freedom Forever have asked the Delaware court to approve a fast-moving sale. Freedom Forever was founded in 2011 and grew to serve homeowners across more than 30 states. It does not sell door-to-door. It runs an engineering and installation platform built on three pillars: a network of independent dealers who bring in customers, a construction operation powered by proprietary software, and finance partners who underwrite the consumer loans and leases. The company calls consumer financing the lifeblood of the business. That structure is also the story of the collapse. The chief executive's declaration points to converging pressures, and the most direct one was financial. The company's finance partners began delaying payments and disputing claims, which set off a feedback loop. Late payments to dealers led to dealer attrition, which cut originations, which cut revenue. Working against the business at the same time was a broader contraction in solar demand and in the financing markets that fund it, including the loss of a federal tax credit that had supported homeowner purchases. Together, those forces drain the runway. The motion, marketed under the name Project Sunshine, has a defining feature, and that is its timeline. The debtors want to compress diligence, bidding, auction, and closing into a window that ends no later than September 11th. That compression tracks two outside deadlines no one in the case controls: a December 31st debt maturity and a July 4th construction deadline to preserve tax credit eligibility. The capital structure shapes the leverage. Total funded debt runs to about $155 million. SolarEdge dominates at roughly $106 million, about 68% of the total, asserting a first priority lien on substantially all assets. Tesla holds about $23 million and a smaller lender about $2.4 million. Notably, no stocking horse bidder has been named. And the debtors have pointedly described the secured interests as purported, preserving their right to challenge priority. The central tension is this: the most valuable asset is the dealer network, the very thing most likely to erode during a marketed sale. The procedures can deliver clean title to the contracts. They cannot compel a dealer to stay. The objection deadline has not yet passed. No sale is guaranteed, and the coming weeks will show whether a timeline built to limit value erosion still gives the market enough time to bid full value. That's it for this week's restructuring report. For more case summaries, court updates, and bankruptcy insights, subscribe wherever you get your podcasts. And when you need the full story behind a case, Research Suite by Stretto gives you access to cases across all jurisdictions in a single search, with summaries cited straight to the source. Start free with the Essential Plan at researchsuite.stretto.com.