TPI Composites, Inc. and its subsidiaries filed an emergency motion in the U.S. Bankruptcy Court for the Southern District of Texas on December 10, 2025, seeking authorization to enter into a Vendor Advance Agreement with Vestas Wind Systems A/S, one of its two primary customers. The motion represents a critical component of the wind blade manufacturer's efforts to maintain operations during its Chapter 11 bankruptcy proceedings, which began on August 11, 2025.
Under the proposed agreement, Vestas would advance funds directly to certain third-party suppliers that provide materials essential for TPI Composites to manufacture wind blades. Without this financial accommodation, the debtors indicated they may lack sufficient liquidity to pay for materials ordered between the petition date and December 5, 2025, potentially jeopardizing timely delivery of products to Vestas and threatening operational continuity at several manufacturing facilities.
Ongoing Customer Negotiations
The Houston-based bankruptcy court case, numbered 25-34655 (CML), has seen TPI Composites and its affiliates navigate complex negotiations with their two largest customers while pursuing both a plan of reorganization and a parallel sale process. The Vestas agreement follows a similar arrangement approved by the court on November 24, 2025, involving GE Vernova International, LLC, the company's other primary customer.
According to a supporting declaration filed by Brian Cejka, a Managing Director at Alvarez & Marsal North America, LLC, TPI Composites requires additional liquidity throughout December 2025 to maintain ongoing operations at manufacturing facilities that produce wind blades for Vestas. The advance payment structure addresses this immediate funding shortfall while enabling the debtors to allocate existing cash resources to other operational needs.
Key Terms of the Vendor Advance Agreement
The agreement includes several key provisions that balance the interests of both parties. TPI Composites would grant Vestas an allowed administrative expense claim equal to the advance amount, less certain offsets including discounts applied to future blade purchases and the value of any materials included in a potential sale. Beginning January 15, 2026, Vestas would receive discounts on blade purchases, with the discount amount calculated on a per-blade basis to equal the total advance divided by the number of discounted blades delivered. The agreement stipulates that all advance funds must be fully repaid by April 30, 2026.
Vestas would have the right to issue purchase orders to TPI Composites through June 30, 2026, under the same terms and conditions that existed under certain purchase agreements dated April 12, 2017, and December 21, 2018, as amended. However, for blades invoiced between January 1, 2026, and June 30, 2026, the price per blade would increase based on annualized volume and be subject to quarterly bill of materials updates and annual foreign exchange adjustments for 2026.
Trigger Events and Material Transfer Provisions
A critical feature of the arrangement involves what the motion describes as trigger events. If TPI Composites fails to deliver the discounted blades on time or defaults on obligations under existing purchase agreements, the company would be required to transfer all rights, title, and interest in the identified materials to Vestas. Upon such a trigger event, the transaction would automatically occur and be deemed self-executing, with the materials sold free and clear of any claims, liens, charges, interests, and encumbrances pursuant to Section 363(f) of the Bankruptcy Code.
The debtors also requested limited relief from the automatic stay to allow Vestas to implement and enjoy the benefits of the agreement, including the right to have identified materials and discounted blades removed from facilities where TPI Composites or its affiliates manufacture wind blades for Vestas.
Legal Justifications Under the Bankruptcy Code
TPI Composites structured the agreement to comply with multiple provisions of the Bankruptcy Code. Under Section 363(b), the debtors argued that entering into the agreement represents a sound exercise of business judgment, as courts typically defer to a debtor's business decisions when actions are taken in good faith and serve the estate's interests. The motion cited established case law holding that courts show great deference to debtors' business decisions absent evidence of bad faith, self-interest, or gross negligence.
For the proposed sale of materials to Vestas upon a trigger event, the debtors relied on Section 363(f), which permits sales free and clear of interests if any of five enumerated conditions are met. The motion noted that the Senior Secured Lenders and DIP Lenders have consented to the treatment set forth in the agreement, satisfying the consent requirement. Additionally, the advance payment would be treated as the purchase price for the identified materials, which the debtors characterized as fair and reasonable value equal to amounts that would otherwise be owed.
Good Faith Purchaser Protections
The motion further requested that Vestas receive protections afforded to good faith purchasers under Section 363(m) of the Bankruptcy Code. This provision shields authorized sales to entities that purchased property in good faith from reversal or modification on appeal, unless the authorization and sale were stayed pending appeal. The debtors emphasized that the agreement resulted from arm's-length negotiations, that Vestas is not an insider of the debtors, and that the advance constitutes fair and reasonable consideration.
To justify granting Vestas administrative expense status, the debtors invoked Section 503(b)(1), which provides for administrative claims for actual, necessary costs and expenses of preserving the estate. The motion argued that the advance is essential to preserving the estates by providing immediate liquidity necessary to procure key materials required for wind blade manufacturing. The debtors noted they would use the advance to satisfy administrative expense claims owed to vendors and suppliers, effectively swapping one set of administrative expense claims for another.
Urgent Timeline for Approval
TPI Composites emphasized the urgency of the request, asking for relief no later than 9:00 a.m. Central Time on December 18, 2025. The motion also requested a waiver of Bankruptcy Rule 6004(h), which normally stays orders authorizing property sales for ten days after entry. The debtors argued that absent emergency relief, they would be unable to effectuate the agreement, which would jeopardize timely delivery of wind blades to Vestas, disrupt operations, and diminish estate value.
The DIP Agent, DIP Lenders, and Senior Secured Lenders have consented to the requested relief on an emergency basis. The debtors also provided a draft of the motion to advisors for the official committee of unsecured creditors prior to filing. The U.S. Trustee for Region 7 had appointed the creditors' committee on August 21, 2025, ten days after the petition date.
Background on TPI Composites Bankruptcy
TPI Composites filed for Chapter 11 bankruptcy protection on August 11, 2025, as a manufacturer of wind blades for major wind turbine producers. The company operates manufacturing facilities in multiple locations, including Mexico, India, Turkey, Iowa, and Arizona. The bankruptcy filing included 22 debtor entities, with operations spanning multiple countries and jurisdictions.
This article was prepared using Stretto Conductor, our new AI-powered assistant that's here to help. Stretto Conductor was able to create this summary of a 30 page court filing in less than a minute. Always review the underlying docket filings for accurate information. The information and responses generated by Stretto Conductor may contain errors or inaccuracies and should not be relied upon as a substitute for professional or legal advice.