Mosaic Sustainable Finance Corporation, one of the oldest residential solar financing companies in the United States, has filed for Chapter 11 bankruptcy protection in Texas, proposing a restructuring plan that offers two potential paths forward for the struggling renewable energy lender.
In a disclosure statement filed on July 3, 2025, with the U.S. Bankruptcy Court for the Southern District of Texas, the Oakland, California-based company outlined a plan to either convert its debt to equity or pursue a sale of its assets, as it grapples with liquidity constraints stemming from unfavorable capital markets, rising interest rates, and declining consumer demand for solar installations.
"The overall purpose of the Plan is to provide for the restructuring of the Debtors' liabilities in a manner designed to maximize recoveries to all stakeholders and to enhance the ongoing financial viability of the Debtors," the company stated in its filing.
Mosaic and its affiliates filed their voluntary Chapter 11 petitions on June 6, 2025, listing approximately $113.6 million in outstanding principal under its prepetition secured credit agreement with Forbright Bank (formerly Congressional Bank). The case is being jointly administered under case number 25-90156.
Founded in 2010 as a clean energy crowdfunding initiative, Mosaic initially offered loans for commercial solar projects before pivoting in 2014 to focus on helping homeowners access residential solar through financing arrangements. The company expanded into other sustainable home improvement verticals in 2017, including bundling solar with roofs, windows, and doors.
The company's business benefited significantly from the Inflation Reduction Act of 2022, which increased investment tax credits for residential solar installations to 30% of system costs. However, recent political uncertainty around the future of these tax credits has negatively impacted the business, according to the filing.
"The U.S. House of Representatives advanced a bill to the U.S. Senate which cast substantial doubt on the prospective availability of residential solar tax credits. This development, which is still not resolved, materially changed the potential risk profile [of] the Debtors' business," the disclosure statement explains.
The restructuring plan presents two potential scenarios. Under the "Plan Equitization Transaction," DIP claims would be converted to 100% of reorganized preferred equity, while 80-100% of prepetition secured loan claims would be equitized into 100% of reorganized common equity. General unsecured creditors would receive either liquidation value or a pro rata share of a recovery pool.
Alternatively, under a "Sale Transaction," the company would sell substantially all of its assets, with proceeds going first to satisfy DIP claims and prepetition secured loans in full. General unsecured creditors would receive distributions only if sufficient proceeds remain.
Prior to filing, Mosaic engaged in extensive restructuring efforts. The company worked with Rockefeller Capital Management beginning in August 2024 to develop a recapitalization plan and later retained Jefferies LLC as investment banker to pursue capital raising opportunities and potential strategic transactions.
"Following the Petition Date, Jefferies has continued pursuing an extensive marketing outreach process. As of the date hereof, Jefferies has contacted 151 parties, 30 parties have executed nondisclosure agreements, and 17 parties are still negotiating nondisclosure agreements," the filing states.
The company has obtained approval for debtor-in-possession financing that provides up to $15 million in new money plus a $30 million roll-up of prepetition secured debt. The DIP facility bears interest at a rate of adjusted term SOFR plus 13%.
Paul Hastings LLP is serving as proposed counsel to the debtors, with a team including Charles Persons and Schlea Thomas in Houston and Matthew Murphy, Geoffrey King, and Michael Jones in Chicago.
The disclosure statement indicates that voting on the plan will continue through August 21, 2025, with only holders of prepetition secured loan claims, general unsecured claims, and subordinated claims eligible to vote. The company anticipates the effective date of the plan would occur no later than 120 days after plan confirmation.
The bankruptcy filing comes at a challenging time for the renewable energy financing sector, as rising interest rates have put pressure on companies that rely on access to capital markets to fund their operations.
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