Oaktree Sued Over $400 Million ‘Uptier’ Deal in TPI Bankruptcy

TPI Composites Inc.'s junior creditors sued Oaktree Capital Management over a nearly $400 million “uptier transaction” with the bankrupt wind turbine blade manufacturer, calling the deal a fraudulent transfer that put the firm ahead of others in line for repayment.

Funds associated with Oaktree, as TPI’s sole preferred equity holder, “leapfrogged” over junior creditors without providing additional funding when millions of dollars in equity was converted to secured debt, an unsecured creditors’ committee said in a Wednesday complaint filed in the US Bankruptcy Court for the Southern District of Texas.

The uptier transaction was a credit agreement exchanging outstanding equity ...