Solar sub-dealers in a national installer's bankruptcy: what to preserve

What should a sub-dealer do first when a national installer files?#

A sub-dealer's first move when a national installer files is to preserve records before portal logins, shared drives and rep email accounts are shut off. Export deal status, commissions, milestone dates and documents from the dealer portal, and save every email and text with the installer's staff.

The second move is to talk to bankruptcy counsel before contacting the installer about money. The automatic stay generally pauses collection actions against a debtor, so demands, setoffs and threats to stop work can create problems even when you are owed. Counsel can tell you whether, how and when to file a proof of claim.

Third, decide how you will speak to homeowners. Customers whose installs stall will call the dealer who sold them. Keep a log, stick to facts, and avoid promises about what the estate or a future buyer will do.

Preservation checklist for dealer records#

The preservation checklist below covers what sales dealers and install dealers typically hold. Store copies in company-controlled storage with a simple index by customer and job, and do not delete or alter anything, including records that look unhelpful.

• 1Dealer agreement, every amendment, commission schedules and any program bulletins that changed pay.
• 2Portal exports or screenshots for each deal: status, milestone dates, commission amounts and holds.
• 3Customer contracts, change orders and financing documents signed through the installer's platform.
• 4Milestone evidence: site survey, design approval, permit, install completion, inspection and permission to operate.
• 5Payment history: remittance advices, bank deposits, and clawback and chargeback notices.
• 6Communications with installer reps and managers, including texts and chat apps.
• 7Homeowner communications about delays, cancellations and complaints.
• 8For install dealers: photos, crew timesheets, materials invoices, permits pulled and any lien notices sent.

Which records support which kind of claim?#

The records that support a claim are the ones that tie each amount to a job, a milestone and a contract term. Counsel will decide how to present a claim; your job is to make every number traceable to a document.

Work done after the filing may be treated differently from work done before it, so dates matter. Keep any request to continue work in writing, with the name of the person who made it.

Install dealers may also hold mechanics' lien rights against the property for unpaid work. Lien rules are state-specific, deadlines are strict, and a lien on a homeowner's house carries reputational costs, so ask counsel whether lien rights exist, whether the case affects them and whether using them makes sense.

What happens to your dealer agreement in the case#

A dealer agreement is usually an executory contract, meaning both sides still owe performance, and the estate may assume or reject it. Assumption generally requires addressing past defaults, after which the agreement continues; rejection generally leaves the dealer with a claim for damages.

The Supreme Court held in Mission Product Holdings v. Tempnology, decided May 20, 2019, that rejecting such a contract has the same effect as a breach outside bankruptcy and does not rescind rights the contract already granted. Ask counsel how that applies to your agreement, including any rights you hold in territories, marketing materials or leads you generated.

Watch for notices in the case that list contracts the estate proposes to assume, assign or reject, along with proposed cure amounts. If your agreement appears with a cure figure that does not match your records, that is the moment to raise it through counsel.

Homeowner records and privacy in a bankruptcy sale#

Homeowner records often end up in a bankruptcy sale because customer contracts, leads and service relationships are among a residential installer's most valuable assets. The Bankruptcy Code limits those sales: if the debtor disclosed a policy barring transfer of personally identifiable information to unaffiliated parties, and the policy was in effect when the case began, the trustee may not sell that information unless the sale is consistent with the policy or the court approves it after a consumer privacy ombudsman is appointed and a hearing is held.

The Code's definition of personally identifiable information covers details such as name, home address, email and phone number provided to obtain a product or service primarily for personal or household purposes, which describes most homeowner solar customers. For dealers, the practical questions are who controls the homeowner data you collected, what your dealer agreement says about it and what your own privacy notices promised. Keep your copies within those limits, and do not use homeowner data in new ways until counsel reviews your position.

Illustrative: a sales-and-install dealer with stranded milestone payments#

Illustrative: a fictional dealer sells and installs residential systems under a national installer's brand and financing. When the installer files, the dealer has jobs at every stage: some awaiting permits, some installed but not inspected, and some at permission to operate with commissions unpaid.

The office manager exports the portal deal list and every attached document that day, then builds a spreadsheet tying each job to its milestone dates, the commission schedule in force and payments received. Crew photos, inspection results and materials invoices are attached by job.

Counsel uses the spreadsheet to prepare the claim and to answer the estate's questions about install status. The dealer also has a factual answer for every homeowner who calls.

How SourceX approaches dealer records#

SourceX does not advise on claims, but it does help companies understand whether well-kept operational records have value beyond the immediate crisis. Dealer job histories, from site survey through permission to operate, show how residential projects actually move, which is the kind of operational record AI developers license.

Any license would come later, through the SourceX five-step transaction, after counsel confirms the records are the dealer's to license and that nothing interferes with the bankruptcy case. Homeowner personal data is removed in preparation, and the SourceX Evidence Packet records provenance, licensing rights, permitted use, the privacy record and release authorization.