Greenlight Capital, the hedge fund founded by investor David Einhorn, is seeking a seat on the board of SunEdison — a solar manufacturing company.

Since July, the company's stock has collapsed around 90%. Investors started selling after SunEdison announced a deal to acquire a residential solar company, and the terms revealed that the company was in a poor cash position.

Einhorn presented his long case for the stock in October 2014 at the Robin Hood Investors Conference.

From the presentation:

We believe the market misunderstands SunEdison. The financial statements are complicated because they consolidate the company’s interests in several public companies, and the non‐recourse debt of various solar projects that SUNE controls.   This makes it challenging to decipher the economic value of the company from a cursory review of the balance sheet or income statement.  We believe this leads to sell‐side analysts mis‐analyzing the company, and the market undervaluing the stock...

Obviously a lot has happened since then. Billionaire hedge fund manager David Tepper, of Appaloosa Management, is a shareholder in one of SunEdison's sister companies, and he's suing SunEdison, for one thing.

Now it seems Greenlight wants to affect some change. They're seeking the board seat for two years, and the ability to buy stock in the company more easily. 

Here's part of the SEC filing (emphasis ours):

SEE ALSO: Here's David Einhorn's SunEdison presentation at Robin Hood 2014

Join the conversation about this story »

NOW WATCH: This is how billionaires can buy their survival during an apocalypse

London-based fund of funds LCH Investments, a subsidiary of Edmond de Rothschild Capital Holdings Limited, recently released its annual top 20 "most successful money managers" list for 2015.

The list measures net gains, after fees, of hedge fund managers since their respective fund's inception. We've included the top seven hedge fund managers below.

Collectively, these titans have made their investors net gains of $199.5 billion since they began their funds. Last year, they raked in $5.1 billion as a group. Two of the top fund managers had a losing year in 2015.

7. John Paulson (Paulson & Co.)

Net gains in 2015: -$2.1 billion

Net gains since inception: $21.4 billion (1994)

Fund's assets under management: $15.6 billion

Paulson's net worth: $11.4 billion

Highlights: In 2015, John Paulson fell from the No. 3 spot on the list to No. 7. He became famous for his 2007 bet against subprime housing; it made him and his investors billions. Since then his returns have been volatile, and his fund's assets have dropped from a peak of $38 billion in 2011 to about $15.6 billion. Just last month Paulson pledged his personal wealth as collateral for a line of credit for his fund from HSBC USA.

6. Stephen Mandel (Lone Pine Capital)

Net gains in 2015: $1.2 billion

Net gains since inception: $22.4 billion (1996)

Fund's assets under management: $29.5 billion

Mandel's net worth: $2.4 billion

Highlights: Lone Pine Capital is led by the billionaire Steve Mandel, who worked at legendary hedge fund Tiger Management early in his career. The fund is now part of a group of funds launched by Tiger alumni known as "Tiger Cubs."

Mandel is betting on companies that dominate the web in 2016, according to an investor letter. 

Lone Pine's Cascade fund, its long-only fund, rose 1.4% in the fourth quarter to end 2015 down 1.2%. Meanwhile, Lone Pine's Cyprus fund rose 4.6% in the fourth quarter, ending the year up 8.7%, while its Kauri fund rose 4.4% in the quarter to end 2015 up 8.9%.

As of the end of 2015, the Cascade fund's 10 largest long-stock positions were Microsoft, Amazon, Tencent Holding, Facebook, Visa, Dollar Tree Stores, Williams Companies, FleetCor Technologies, JD.com, and Charter Communications. The fund trimmed some of its stake in embattled Canadian drug company Valeant Pharmaceuticals.

5. Andreas Halvorsen (Viking)

Net gains in 2015: $1.7 billion

Net gains since inception: $22.5 billion (1999)

Fund's assets under management: $30.2 billion

Halvorsen's net worth: $2.8 billion

Highlights: Viking, which like Lone Pine is a "Tiger cub" hedge fund, had a strong 2015 overall, finishing up 8.3% for the year, according to the fund's fourth-quarter letter. The hedge fund bought more Valeant Pharmaceuticals stock in the fourth quarter, even after it dragged down the fund's performance and was its "biggest loser."

Some of the biggest hedge fund names in the world are loading up on bets that China will sharply devalue its currency.

According to a Wall Street Journal report published Sunday, Kyle Bass, Stanley Druckenmiller, David Tepper, and David Einhorn have all positioned themselves for sharp devaluations in the yuan. 

But it's complicated. 

Movement in the yuan really caught the market's attention back in August 2015 when China devalued the yuan in a move that was the currency's largest in a decade.

Though as FT Alphaville's Matt Klein noted at the time, relative to some of the devaluations seen in recent financial history, this move was nothing, really.

The yuan, which is pegged against the US dollar, had been strengthening as the dollar's value increased dramatically and China kept their target peg at the same level.

Since that August break the yuan's value has continued to slide but is still likely far overvalued against what a market-set would be. That's more or less the point of these hedge funds making their currency bets. 

With the yuan sitting at around 6.6 against the US dollar currently, strategists at Bank of America think it could be headed to 6.9 by year-end.  

The basic idea behind devaluing your currency is that it makes your exports more attractive if trade partners are able to acquire more of your goods for the same amount of nominal dollars. This does, however, impact the purchasing power of your domestic consumers and the profits of exporting corporations. 

But with the People's Bank of China publicly pledging to defend the yuan — that is, continue to keep it relatively stable against the dollar — the PBoC has been forced to spend billions of dollars to defend its peg by accumulating yuan. 

As a result, the PBoC's foreign-exchange reserves have diminished significantly.

Earlier this week China's People's Daily warned investing legend George Soros against"going to war" on China's currency after Soros made comments at the World Economic Forum in Davos that a hard landing in China was inevitable and that China's problems were one of the "root causes" of the world economy's current struggles, particularly in emerging markets. 

Soros, you'll recall, is one of the world's famed currency speculators who "broke the Bank of England" back in the early '90s. According to The Journal, a Soros representative declined to comment on any currency positions. 

Bill Ackman also threw his hat into the yuan ring earlier this week when he disclosed in a letter to investors that he's been betting on a yuan devaluation since last summer and continues to hold that position. 

SEE ALSO: BILL ACKMAN: I'm short China and Saudi Arabia

Join the conversation about this story »

NOW WATCH: These are the biggest risks facing the world in 2016

Solar firm SunEdison is getting punished for the second day in a row.

The stock is fell as much as 14% on Thursday on the news that the company is being sued by Latin America Power Holding B.V. for not completing a $733 million buyout, according to The Wall Street Journal.

LAPH shareholders want a New York judge to freeze $150 million of the company's assets.

From The Journal:

In court papers filed in New York Supreme Court Wednesday, the Latin America Power investors say SunEdison, which has suffered a “stunning financial collapse” in its stock price, is “teetering on the edge of bankruptcy,” and has allegedly said it would transfer assets away.

This is the last thing SunEdison needs. The stock started falling in July, when its attempt to acquire solar firm Vivint revealed to investors that the company may not have as much cash as they thought. The stock has fallen 90% since then.

Before that, though, SunEdison was a Wall Street darling. Greenlight Capital's David Einhorn, who now has a seat on the company's board, presented the stock as long idea at the Robin Hood Investors Conference back in the fall of 2014. Hedge funds starting piling into the stock.

Eventually, though, they all got burned.

SunEdison is also dealing with legal action brought by billionaire investor David Tepper, of Appaloosa Management. He has a stake in TerraForm Power, one of two of SunEdison's sister companies, called yieldcos. Yieldcos act as utilities that manage and collect fees from the projects SunEdison builds.

According to Tepper, the Vivint deal would force TerraForm Power to purchase low-grade assets. Even worse, to a lot of investors on Wall Street, the complicated yieldco structure has come to represent corporate financial engineering at its worst.

For more on the lawsuit, head to The Journal >> 

A year in SunEdison stock below:

SEE ALSO: Wall Street's getting crushed by a form of financial engineering you've probably never heard of

Join the conversation about this story »

NOW WATCH: You’ll never have to pay an electric bill again with this traveling tiny home

Hedge fund billionaire David Tepper, who runs $20 billion Appaloosa Management, is bullish on energy stocks, according to his fund's latest 13F filing.

Tepper loaded up on stocks in the energy sector in the fourth quarter, including:

• Antero Resources (557,465 shares)
• Cabot Oil & Gas (1.38 million)
• Energy Transfer Partners (5.14 million)
• Kinder Morgan (9.44 million)
• Range Resources (1.6 million)
• Southwestern Energy (4.38 million)
• Tortoise Energy Infrastructure (47,105)

Tepper also has a long position in TerraForm Power, a sister company of solar-power manufacturer SunEdison, also known as a "yieldco." Yieldcos generate cash from a group of assets and then pay it back to investors as dividends. He owns 7.6 million shares of TerraForm and is suing SunEdison.

Meanwhile, he pared back his stakes in Apple (sold 45,000 shares) and GM (sold 300,000).

In all, Tepper initiated 26 new positions in the fourth quarter and added to 13 already-existing positions. He pared back in seven stocks and dropped another seven altogether, including JetBlue.

Tepper's largest position is 3 million shares — call options — of the SPDR S&P 500 ETF.

Hedge funds have to disclose only their long-equity holdings every quarter in these filings. What's more, the filings aren't published until 45 days after the end of the quarter, so it's possible that funds could have traded in and out of positions.

Join the conversation about this story »

NOW WATCH: Funding Circle's Sam Hodges: 'Everyone has a plan, until you get hit in the teeth'

SunEdison, the solar manufacturing company that has been the bane of Wall Street's existence since it started crashing in July, had a wonderful day.

That's rare.

The stock surged 36% in Thursday's trading day.

The reason why SunEdison surged is related to why it plummeted in the first place: its attempt to acquire residential solar company Vivint.

From Bloomberg: "Vivint shareholders led by Blackstone Group LP., which owned 77 percent of the shares at the start of the year, approved the $1.9 billion deal Wednesday, with more than 100 million votes in favor and 101,000 against."

SunEdison's shares took a nosedive when the Vivint deal was announced in July because its terms revealed to investors that SunEdison was likely not as cash-rich as they assumed. Additionally, the deal included "take or pay agreements" with TerraForm Power, SunEdison's yieldco — a sister company it created to manage its projects like a utility.

The take-or-pay agreement, which forces TerraForm to buy certain Vivint assets, upset hedge fund manager David Tepper of Appaloosa Management, a TerraForm shareholder. He doesn't think that those assets are as valuable as SunEdison is making them out to be, so he's suing SunEdison over the deal.

And while SunEdison had a monster Thursday, it's still down 92% over the last year.

So this ain't over yet, people.

Join the conversation about this story »

NOW WATCH: The days of restaurant tipping are dying

SunEdison, the solar power company that has seen its stock fall 83% in the last six months, is crashing yet again on some disappointing news.

The news is that Appaloosa Management, the hedge fund helmed by billionaire David Tepper, will accept a Delaware court's offer to expedite its lawsuit against the company.

"Anybody who read the judge's opinion, who read the transcripts of the trial, knew we were going to go for an expedited trial," Tepper said in a phone call with Business Insider.

"We don't start things just to start things."

The stock is down more than 11% on the news.

The lawsuit

Appaloosa's lawsuit has to do with the deal that started dragging SunEdison's stock down in the first place last July — SunEdison's attempt to acquire residential solar firm, Vivint. The deal revealed to Wall Street that SunEdison's cash position might not be as strong as investors thought.

For Appaloosa's part, it is suing SunEdison specifically because it owns a stake in one of SunEdison's subsidiaries, a yieldco called TerraForm Power. Yieldcos are companies formed to manage solar projects after they're complete, and they operate like other power utilities. In the Vivint deal, TerraForm Power would have been forced to enter into take-or-pay agreements, which would make it necessary for the company to buy projects from SunEdison/Vivint, or pay a fee.

Appaloosa doesn't think the take-or-pay agreements are a fair deal. It tried to block the Vivint acquisition entirely, but a Delaware Court said the acquisition could go through last week. SunEdison's stock rallied on the news.

That ruling didn't actually mean that Appaloosa lost. The take-or-pay agreements and their fairness to TerraForm Power shareholders are still under consideration. In fact, the Court said that no one should “underestimate this Court’s power to grant relief in the future if it is warranted.”

It also called SunEdison's process in doing the deal "inherently suspect," and that “troubling” circumstances surrounding one of the Conflicts Committee’s advisors  “raise serious questions that go to the fairness of the process.”

This is not over people.

Join the conversation about this story »

NOW WATCH: This is how the Internet feels about Kanye West’s $53 million debt

SunEdison, the embattled solar power company that has seen its stock fall 92% over the last year, had another horrific trading day on Thursday.

The shares fell 15%.

SunEdison started falling in July, when an attempt to acquire residential-solar firm Vivint revealed that the company's cash position wasn't as secure as investors thought.

Part of the problem, according to billionaire investor David Tepper, who is suing the company, is that SunEdison was passing on bad deals to its subsidiaries called yieldcos. Yieldcos act like utilities, collecting money from solar projects SunEdison installed. In Vivint's case, the yieldco in question is called TerraForm Power.

Tepper's hedge fund, Appaloosa Management, which has an almost 10% stake in TerraForm Power, brought its lawsuit at the end of last year. Since then, SunEdison has delayed its annual report, and said that it will suspend its dividend.

Now that you've got all that, here's what dragged SunEdison's stock down on Thursday.

• First off, it looks like the banks financing the Vivint deal are thinking twice about loaning money to SunEdison, according to a Wall Street Journal report.
• Then there are the downgrades. Macquarie cut its rating of the stock to neutral, and its price target from $20 to $2.
• Analysts at Needham cut their rating from buy to hold.
• And analyst at Credit Suisse wondered if Vivint itself may have reason to sue SunEdison.

The stock closed the trading day at $1.52.

Join the conversation about this story »

NOW WATCH: This is how the Internet feels about Kanye West’s $53 million debt

SunEdison, the largest renewable-energy company in the world, is again delaying the filing of its 10-K annual report.

In a release Wednesday, the company said that it had still not resolved accounting issues that led to the delay of the report and that it would take longer than the 15-day allotment that expired Tuesday to resolve the matter.

The company said the "material weakness" in the company's accounting was due to "deficient information technology controls in connection with newly implemented systems." This has caused delays in the review by both the company's internal audit team and its independent auditor KPMG.

This news is merely another blow for SunEdison, which has seen its stock drop by more than 90% since July. Most recently, its CFO stepped down on Friday to become CEO of two of the company's yieldcos. Hedge fund giant David Tepper launched a lawsuit against the company.

SunEdison shares are crashing again in response to the latest news, down about 13% at the open Wednesday.

Here's the full release from SunEdison:

MARYLAND HEIGHTS, Mo., March 16, 2016 /PRNewswire/ -- SunEdison, Inc. (NYSE: SUNE), the largest global renewable energy development company, announced today that it is delaying the filing of its Annual Report on Form 10-K for the year ended December 31, 2015 beyond the extended due date of March 15, 2016.

The scope of work required to finalize the Company's financial statements included in the 2015 Annual Report on Form 10-K has expanded due to the identification by management of material weaknesses in its internal controls over financial reporting, primarily resulting from deficient information technology controls in connection with newly implemented systems. Because of these material weaknesses, additional procedures are necessary for management to complete the Company's annual financial statements and related disclosures, and for the Company's independent registered accounting firm, KPMG LLP, to finalize its audits of the Company's annual financial statements and the effectiveness of internal controls over financial reporting as of December 31, 2015. In addition, the investigation by the Audit Committee, previously disclosed by the Company on Form 12b-25 filed with the Securities and Exchange Commission on February 29, 2016, concerning the accuracy of the Company's anticipated financial position previously disclosed to the Company's board of directors, has not yet been finalized.

To date, the additional procedures performed as a result of the material weaknesses identified and the investigation by the Audit Committee have not resulted in the identification of any material misstatements or restatements of the Company's audited or unaudited consolidated financial statements or disclosures for any period previously reported by the Company.

SEE ALSO: Steve Cohen disclosed a 2.8 million-share stake in a tiny pharmaceutical company that jumped 432% on Tuesday

Join the conversation about this story »

NOW WATCH: James Altucher makes an argument for not paying back your credit card debt

The CEO of both of SunEdison's subsidiaries, TerraForm Power and TerraForm Global, is out. 

SunEdison is the largest solar-power firm in the world. Its two subsidiaries, known as yieldcos, were created to manage solar projects like utilities. 

It's stock is down 8% to $0.54 on this news.

Brian Wuebbels became CEO of both yieldcos after a management shake-up in November and until earlier this month served as CFO of SunEdison as well.

He will now be replaced by a chair committee in the interim headed by the chairman of both subsidiaries, Peter Blackmore.

The shake-up is the latest episode in a dramatic nine months for the firm.

The stock has fallen almost 98% since July, when an expensive attempt to acquire Vivint, a residential solar firm, revealed to investors that the company might not have as much cash as it needed.

On Monday, it was reported that the SEC is looking into whether the company lied to investors about its cash position. On Tuesday, SunEdison's stock fell over 50% to near $0.50, after TerraForm Global warned that its parent might go bankrupt.

Then, on Wednesday, billionaire hedge fund manager David Tepper filed a lawsuit calling for Wuebbels to step down (among a bunch of other things).

No, we ain't gonna take it

Investors started asking questions about SunEdison's cash position not only because the Vivint deal was expensive, but also because of its terms. The company was forcing its yieldcos to engage in take-or-pay agreements to finance the (now defunct) deal. Basically those agreements meant that the yieldcos would have to buy deals from the parent, or pay a fee.

Naturally, this did not please investors in the yieldcos. David Tepper, the billionaire founder of hedge fund Appaloosa Management, was especially unhappy. He's a TerraForm Power shareholder and started suing SunEdison over these agreements in December. 

Vivint stepped away from the deal earlier this month, but still Tepper stayed the course. He told Business Insider that "we don't start things just to start things." To Tepper, this is about governance. 

See, in the November shake-up that made Wuebbles CEO of the yieldcos, SunEdison also appointed new members to its Conflicts Committee and to the boards of all its subsidiaries. Three days before the company announced these changes, two TerraForm Power board members quit, writing identical letters.

Bothletters said the following:

I am resigning from the Board of Directors of both the above referenced companies effective immediately.

The respective Conflicts Committees, as constituted before today, together with independent advisors, had been working hard and in good faith to protect the interests of the stockholders of the two companies.

As a result of today’s actions of each of the Boards, I don’t believe I will be able to do so going forward and therefore resign.

That is why, on Wednesday, Appaloosa filed an amended complaint accusing SunEdison's Conflicts Committee of being a "sham committee." He wanted Wuebbles out, and now he's got it.

But Tepper also called for the removal of Blackmore, who will now be running TerraForm Power along with two more people Tepper wants gone — Christopher Compton and Janis Jenkins-Stark.

Baby steps.

SEE ALSO: Wall Street's getting crushed by a form of financial engineering you've probably never heard of

Join the conversation about this story »

NOW WATCH: Turns out con artists have an easier time fooling smart people

SunEdison, the biggest solar-energy manufacturing firm in the entire world, is nearing bankruptcy.

Its decline has been swift and brutal, taking some of the most legendary names in finance with it.

The stock that was once a hedge fund darling has turned into Wall Street's nightmare.

A company that was once worth more than $10 billion is now valued at $150 million, with close to $8 billion in long-term debt.

This is because the company's business structure, which was once considered quite complex, was in a matter of months found to be quite simple — it simply could not generate enough cash.

The simple truth started to reveal itself to Wall Street in July, when SunEdison's stock started its 98% descent. The tip was a deal. The company wanted to pay a 52% premium for a residential-solar firm called Vivint.

Not only was that too expensive for investors to stomach, but they felt residential assets were not part of SunEdison's more lucrative commercial vision.

So they sold, and sold, and sold.

Now the company is facing challenges on all sides.

The SEC is investigating whether the company may have lied to investors about its cash position during some of its darkest times last fall. Billionaire investor David Tepper of hedge fund Appaloosa Management, an investor in one of SunEdison's subsidiaries, is agitating for change at the company. And now the company is preparing to file for bankruptcy.

But we'll get to that in a moment. First lets talk about the deal that brought it all down.

From darling to demon

It's impossible to talk about SunEdison without talking about what a darling the stock once was. In October 2014, hedge fund billionaire David Einhorn of Greenlight Capital pitched the stock as a long position at an elite investment conference. He called SunEdison"a well‐run, financially savvy company, benefiting from an open-ended growth opportunity trading at a bargain price."

Part of SunEdison's "financial savvy" was its structure. The company has two subsidiaries known as yieldcos. The yieldcos are supposed to act like utilities for the solar projects it builds, collecting fees and funneling those back to the parent so the whole system would have cash.

One of SunEdison's yieldcos is TerraForm Power. It handles US domestic projects, and David Tepper has a near 10% share in the stock. The other is called TerraForm Global. It handles international projects.

As is Wall Street's wont, investors followed Einhorn into the trade. By August of the following year they were regretting that. In July — when SunEdison's stock was about $30 — the company announced that it would buy Vivint, and the expensive deal sent investors running for the hills.

And it eventually sent Tepper to court.

'We don't start things just to start things'

By November, SunEdison's stock price was around $7, and the company decided to shake up its board and Conflicts Committee. That led to two board members leaving the company, saying they could no longer in good faith say they were doing what was best for shareholders.

Appaloosa started fighting with SunEdison over the Vivint deal, but really the fund's consternation was about deep issues with the company's corporate governance — the same issues that led some of the company's board members to leave.

To execute the deal, SunEdison created take-or-pay agreements for its yieldcos. In short, TerraForm Power would have to take on SunEdison projects or pay a fee. This did not suit Appaloosa.

"The July announcement of the acquisition of the Vivint Solar ('VSLR') portfolio of residential rooftop assets marks an unfortunate departure from this business model and appears to serve the sole purpose of promoting SUNE's desire to acquire VSLR's development and operating assets, rather than enhancing the quality and value of TERP's holdings," Tepper wrote in a December letter before filing the lawsuit.

When Appaloosa did file its lawsuit in January, the stock was at $2.81.

Watching all of this drama, Vivint eventually pulled out of the deal in early March. The company said that it did not think that SunEdison had the cash to pull the deal off, and that it would take legal action. Meanwhile, SunEdison was pulling out of all sorts of deals left and right.

Then, on Tuesday, TerraForm Global, announced that its parent was in danger of going bankrupt.That sent SunEdison's share price crashing, dropping to below $0.50.

On Wednesday, it was announced that Brian Wuebbels, CEO of both of SunEdison's subsidiaries, TerraForm Power and TerraForm Global, would step down from his post. That marked a small victory for Tepper, who had pushed for his removal. Still, though, he wants to see further changes.

The Department of Justice, meanwhile, wants to see all of the documents surrounding the Vivint deal.

This is far from over.

SEE ALSO: Wall Street's getting crushed by a form of financial engineering you've probably never heard of

Join the conversation about this story »

NOW WATCH: Giant floating solar panels are saving a water company millions of dollars

If you move away from your home state, some friends might throw you a party. Maybe you'll get a happy-hour discount at your local bar.

If you're really a big deal, you might get to throw out the first pitch at your local minor-league baseball team's next game.

Other than that, everything will be pretty much the same after you're gone.

That is, of course, unless you're billionaire David Tepper.

If you are him, then when you move away you have the potential to send your whole state ( in this case New Jersey) into red-alert mode.

Tepper, the founder of the hedge fund Appaloosa Management, moved to Florida last fall. This, according to Bloomberg, has leaders of his former state very concerned.

From Bloomberg:

"We may be facing an unusual degree of income-tax forecast risk," Frank Haines, budget and finance officer with the Office of Legislative Services told a Senate committee Tuesday in Trenton.

New Jersey relies on personal income taxes for about 40 percent of its revenue, and less than 1 percent of taxpayers contribute about a third of those collections, according to the legislative services office. A one percent forecasting error in the income-tax estimate can mean a $140 million gap, Haines said.

Tepper, who founded his hedge fund in 1993 after working at Goldman Sachs, is worth $10.6 billion to $11.6 billion, depending on whom you ask (Forbes or Bloomberg).

New Jersey probably has some precise numbers on that too.

Join the conversation about this story »

NOW WATCH: The real estate trick billionaires use to sell their penthouses faster and for more money

SunEdison, the largest renewable-energy firm in the world and the bane of Wall Street's existence since July, filed for bankruptcy on Thursday.

So story over, right? One for the books. A massive company with $11 billion in debt and an SEC investigation hanging over its head bites the dust.

Not exactly. SunEdison has creditors, and those creditors are going to want things. They also may want things that SunEdison doesn't want to give them.

That is the beginning of another story. Instead of watching a stock death drop, we may be about to watch a creditor grudge match.

And it's already becoming clear (at least a little bit) what creditors and SunEdison might be fighting over.

But first, a review

SunEdison's story is one of a company that grew too fast and burned way too much money in the process. According to the company's own bankruptcy documents, it created a financial structure that "required intensive capital in order to build."

That structure was introduced in 2014, when the company created two subsidiaries, called yieldcos, to manage the projects that it built assets for. They are called TerraForm Power (TERP) and TerraForm Global (GLBL), and while they are separate and publicly traded, SunEdison has incentive distribution rights (IDR) over them and retains a lot of management control.

Of course, to make sure that the yieldcos had projects, SunEdison had to grow. That took a lot of money.

SunEdison's stock started crashing in July, after it announced that it would try to acquire Vivint, a residential-solar company, for a 52% premium. That deal for residential assets deemed inferior to the commercial assets SunEdison usually acquired tipped investors off to the idea that SunEdison may not have as much cash as they thought.

That's also in part because it used take-or-pay agreements with its yieldcos to finance the deal. Basically the yieldcos would have to take on projects the parent made or pay a fee.

After that the stock fell, and the rest is the stock-price death drop we know today.

Cry about it

The litany of mishaps from July to now is long. There's the missed annual-report filing, the ultimately canceled Vivint deal (among a few), the missed debt payments, the embarrassing management shake-ups. Still, SunEdison plans to stay in business during its restructuring and has not included the yieldcos in any bankruptcy proceedings.

That said, you can see why yieldco shareholders might be a little upset about their arrangement with the parent. SunEdison gets a lot of cash from them legally and retains control. However, their interests might not always be aligned. (Like when SunEdison might want the yieldcos to buy a project they don't want.)

That is why TerraForm Power shareholder and billionaire hedge fund manager David Tepper of Appaloosa Management sued SunEdison earlier this year. He rarely goes activist on a company, so that should tell you how dire this situation is.

From a letter he sent the company on December 1 of last year:

Thus, it is obvious that the deterioration in TERP's security prices and credit profile this month results from (among other things): (1) the transmission of financial stress related to its 'Sponsor's' ambitious growth objectives and over-extended financial commitments; and (2) TERP's incomplete and selective disclosures.

In other words, you're managing us to poverty.

'Under my thumb is a dog who just had its day'

This is where we get to the stuff that SunEdison and its creditors may fight over. And because of the structure we just discussed, it's not just a fight between SunEdison and its creditors. The yieldco shareholders have a dog in the fight too.

That is because one of the ways SunEdison can raise some money is by messing with its about $700 million worth of Class B shares in TerraForm Global and TerraForm Power.

There are two ways this could go, according to Credit Sights:

SUNE creditors can seek to maximize the value of those Class B shares 2 ways: 1) restart the SUNE DevCo/drop down machine by growing TERP and GLBL and possibly hitting the incentive distribution rights (IDR) splits, which would potentially increase cash sent back to SUNE; or 2) sell the Class B shares to a third party, which will likely create stronger corporate governance and investor confidence in TERP and GLBL and possibly more manageable balance sheets. We feel that option 2 may entice the market back to award TERP and GLBL with cheaper costs of capital, which in our minds should be the board's #1 priority as the yieldcos begin their respective healing processes.

You already know what yieldco shareholders probably want — option two. They probably want to be free of take-or-pay agreements and operate more independently.

SunEdison creditors, though, may want to retain the yieldcos to hit them up for more consistent cash. Plus, who knows who would buy the yieldcos? It might be someone or some people who won't be as friendly to SunEdison's management and control. 

Isn't that something you would fight over?

For more on SunEdison's troubles, listen to BI's Josh Barro and Linette Lopez talk about it on their podcast, Hard Pass:

Join the conversation about this story »

NOW WATCH: A tech company made a new type of solar panel that's about to turn the energy industry upside down

Hedge fund billionaire David Tepper has dumped his massive Apple investment, according to a filing with the SEC.

Tepper had previously held 1.26 million shares, last valued around $133 million, according to data from Bloomberg.

This is just another huge hedge fund to dump the technology giant.

Carl Icahn announced on April 28 that he had sold all of his shares of Apple because of concerns over growth in China. Greenlight Capital's David Einhorn has also been decreasing his stake for some time.

This is a stunning turnaround, as hedge funds have long loved Apple stock. As of August 2015, 146 of the 833 hedge funds tracked by Goldman Sachs had the company as one of their largest positions. This earned the iPhone maker the No. 2 spot on Goldman's list of stocks "most loved" by hedge funds.

Since then, however, Apple has been faced with slowing iPhone sales and disappointing earnings, sending the stock lower. In fact, the company lost its status as the most valuable in the world.

Tepper's fund, Appaloosa Management, also bought 945,000 shares of the troubled pharmaceutical company Valeant, worth $24.8 million during the first quarter. He has since sold the stake in the company, however, making a profit from the trade.

According to the filing, Tepper has also taken a new position in Facebook, buying 1.6 million shares in the first quarter, and Bank of America with 6.9 million shares.

SEE ALSO: Here's how famous short seller Carson Block picks a takedown target

Join the conversation about this story »

NOW WATCH: Apple just invested $1 billion in this Chinese company

NEW YORK (Reuters) - A number of big-name hedge fund investors soured on U.S. stocks in the second quarter and moved to gold and other bearish bets, failing to anticipate the stock market rally in the current quarter.

George Soros, Jeffrey Gundlach and David Tepper were among the billionaire hedge fund investors and money managers who slashed their long equity positions in the second quarter, according to regulatory filings.

Gundlach, who oversees more than $100 billion at DoubleLine, told Reuters last month, "The artist Christopher Wool has a word painting, 'Sell the house, sell the car, sell the kids.' That's exactly how I feel – sell everything. Nothing here looks good."

Portfolio disclosures of long positions by hedge fund managers, which come 45 days after a quarter ends, are closely watched for their insight into the bets of managers in the roughly $3 trillion hedge fund industry and as a source of investment ideas.

Tepper, who did not exercise call options held in the prior quarter that would have allowed him to buy shares in the S&P 500 and PowerShares QQQ Trust, is cautious about the stock market, according to people familiar with his positioning on Monday.

Soros, who once called gold "the ultimate bubble," added a position in Barrick Gold Corp valued at $263.7 million to his fund during the first quarter.

Shares of the gold mining company are up nearly 185 percent over the last 12 months as gold has rallied the most since 2008 on concerns about central bank easing and Britain's vote to leave the European Union.

Billionaire hedge fund activist investor Icahn, meanwhile, had a net short position of 149 percent in the second quarter that was little changed from the first quarter, according to comments from company management on a conference call earlier this month.

Those bearish positions could hurt hedge fund managers at a time when many in the industry are struggling to keep their investors happy and justify their fees.

(Reporting by David Randall; Editing by Jennifer Ablan)

SEE ALSO: 2 dire warnings for the global economy

Join the conversation about this story »

David Tepper, the CEO and founder of the hedge fund Appaloosa Management, is not one for mincing words.

And in a wide-ranging interview with CNBC's Scott Wapner on Monday, he had some choice words for one of the presidential candidates.

"You have one person with questionable judgment, and the other person that may be demented, narcissistic, and a scumbag," Tepper said. "I'm not saying which one is which. You can make your own decision on that."

Tepper, who is well known on Wall Street for his blunt manner, has historically leaned toward the Democratic Party, though he has supported candidates on both sides of the aisle. This year, he said, he has not financially supported either candidate for president — Democrat Hillary Clinton or Republican Donald Trump.

And now, the market

Of course, the market is waiting for the outcome of this election. For now, Tepper is "pretty cautious on the market, not outright bearish." He's invested his fund mostly in the bond market and has gone into cash.

"We're pretty light in the stock market," he said. "I just don't see the market having the ability to move up that much."

Here's how he looks at the potential outcome of the election: If the Democrats take the Senate as well as the White House, we'll see a more highly regulated environment — "highly anti-bank" and "anti-pharmaceuticals," Tepper said.

If the stock market goes down based on this situation, Tepper said he thinks the Federal Reserve may become more dovish and push off raising rates. This, he believes, it would do at its own peril.

"A steeper yield curve is better for all of these economies," he said, referring to Germany, the UK, and the US. Higher yields would help banks — especially ailing banks in the EU — and state pension funds, for example.

Wapner asked Tepper if this view means that he's shorting bonds.

"I'm not long them," Tepper responded.

Join the conversation about this story »

NOW WATCH: Former Wells Fargo employees say they were fired after reporting fraudulent activity

David Tepper, founder of Appaloosa Management, needs little introduction. After leaving Goldman Sachs to start his $19 billion hedge fund in 1993, he's had one of the best track records on Wall Street. Some have called him the greatest trader of his generation, but you readers can fight about that in the comments.

Linette Lopez: The yield curve is still flat, many think that European banks are still under capitalized, and you said on a recent CNBC interview that you don't think the stock market can go much higher (which generally means there's only one way it can go). In this market, where do you think is the most dangerous place to keep your money?

David Tepper: I think German and UK bonds are most susceptible to a significant decline. On UK bonds, with weakness in currency, future inflation indicators have picked up to the 3% area with close to 1% 10 year. And Europe seems to be picking up with zero bund yields and inflation that will pick up to 1.5% in first quarter. So both UK bonds and German bunds are a sell.

Lopez: Say the Fed does raise rates in December, then what? What do policymakers need to do to support the Fed during this transition? Are you in the 'there must be fiscal stimulus' camp?

Tepper: I think some infrastructure spending would be good for economy and would help the Fed towards policy normalization.

Lopez: What's the biggest thing on your clients' minds right now that they keep asking you about?

Tepper: That I will give them back their money.

Lopez: Around this time last year you said the Chinese yuan was over-valued. Now it's hit a 6-year low against the dollar. Do you think it still has farther to fall?

Tepper: It has a little further to fall. They seem to be accepting a bit more weakness in the currency. And there is still a need to take money out of country and outflows seasonally pick up this time of year.  

Lopez: You called one of the US presidential candidates "demented, narcissistic and a scum bag" on national TV. You left which one up to the public's imagination, but as a new Florida resident, are you afraid comments like that will get you banned from Mar a Lago?  

Tepper: My mother told me if you have nothing nice to say about someone don't say anything — that [comment] was my version of that.

SEE ALSO: Short-seller Andrew Left gives us his post-election play

Join the conversation about this story »

NOW WATCH: Here's how much $100 is worth in every state

Billionaire hedge fund manager David Tepper has officially come out in support of Hillary Clinton.

The CEO of Appaloosa Management on Monday told CNBC's Squawk Box he was voting for the Democratic nominee in her bid for the White House.

He said he would be voting Republican down the rest of the ticket.

Tepper described the uncertainty he said would surround a Donald Trump presidency.

"This is a guy that has to remind himself on the podium to stay on message," Tepper said. "Is he going to get into the Oval Office and he is going to say, 'Don't press the button, Donald, don't press that red button'? It could be dangerous — I don't want a guy that talks like that to himself."

Tepper also criticized Trump for not donating "one dime" to benefit dinners following Hurricane Sandy or the September 11, 2001, terrorist attacks.

"You can't tell me this is a charitable, generous person," he said.

Tepper said Trump "masquerades as an angel of light" but was actually "the father of lies."

Tepper had previously referred to one presidential candidate as "demented, narcissistic, and a scumbag," without identifying which candidate he meant. Monday was the first time he expressed public support for Clinton.

"You have one person with questionable judgment, and the other person that may be demented, narcissistic, and a scumbag," Tepper said in October. "I'm not saying which one is which. You can make your own decision on that."

He said at the time he had not provided financial support to either major-party presidential nominee.

Tepper on Monday said he hoped people could "join hands in some fashion" after the election.

Here's part of the interview:

SEE ALSO: David Tepper tells us the most dangerous place to put your money

Join the conversation about this story »

NOW WATCH: These are the business skills you learn from being in a gang

London-based fund of funds LCH Investments, a subsidiary of Edmond de Rothschild Capital Holdings Limited, just released its annual top 20 "most successful money managers" list for 2016.

The list measures net gains, after fees, of hedge fund managers since their respective funds' inception.

We've included the top seven fund managers below.

As a group, they manage more than $275 billion in assets, and have generated more than $200 billion in gains since inception.

They generated $10.6 billion in returns in 2016, with one of the seven, George Soros' Soros Fund Management, losing money over the year. 

7. Och Ziff - Daniel Och

Net gains in 2016: $1.1 billion

Net gains since inception: $23.1 billion (1994)

Fund's assets under management: $33.5 billion

Highlights: Och-Ziff Capital Management agreed to settle charges of bribery, paying nearly $200 million to the Securities and Exchange Commission, in September. The hedge fund's CEO, Dan Och, agreed to pay nearly $2.2 million to settle the charges with the SEC, as did the firm's CFO, Joel Frank. The firm was accused of bribery in its financial dealings in Africa, which the SEC says included run-ins with Muammar Gaddafi's relatives.

The fund also found itself the recipient of some savvy investing advice from a 24-year old Chipotle cook. 

6. Appaloosa - David Tepper

Net gains in 2016: $0.7 billion

Net gains since inception: $23.5 billion (1993)

Fund's assets under management: $15.8 billion

Highlights: Tepper came out in support of Hillary Clinton ahead of the US election, calling Donald Trump, who went on to win the election, "the father of lies." He has said however that the US would benefit from some infrastructure spending, a key leg of Trump's campaign platform. 

5. Citadel - Ken Griffin

Net gains in 2016: $1 billion

Net gains since inception: $25.2 billion (1990)

Fund's assets under management: $24.1 billion

Highlights: Citadel has been hiring, recently adding portfolio manager Jennifer Pollak, who moved from Folger Hill Asset Management. Citadel's Aptigon unit last year poached about 17 portfolio managers from Visium Asset Management amid an insider-trading scandal.

David Tepper's Appaloosa went big on pharma stocks in the fourth quarter. 

The fund took big new positions in Teva ($183 million), Pfizer ($156 million), and Mylan ($125 million) in the final three months of the year, according to a 13F filing. They were the fund's biggest new positions in the period. 

In addition, Appaloosa raised its stake in Allergan by 250%, increasing its position by around 3 million shares to a stake worth $894.9 million. The additional shares are worth around $660 million, and Allergan is now the firm's top holding. 

The combined investment in the three new pharma positions and the increased Allergan stake adds up to around $1 billion.

The quarterly filing, called a 13F, lists the long stock positions of investment firms. The positions are current as of 45 days ago, so it is possible that Appaloosa has since changed its positions. 

Bloomberg analyzed the data based off of a regulatory filing that the firm filed February 14. According to the 13F, Appaloosa's biggest moves in the fourth quarter were:

• A new position in Teva valued at $183.2 million
• A new position in Pfizer valued at $156.2 million
• A new position in Mylan valued at $124.9 million
• Appaloosa increased his position in Allergan to $894.9 million

Join the conversation about this story »

NOW WATCH: PayPal's CEO reveals the 2 key trends that are driving the fintech revolution