It looks like Suntech Power (NYSE: STP) is finally going to bite the dust, at least in its current incarnation. The company filed for liquidation today, a response to debt holders filing for an involuntary bankruptcy of the company earlier this week. The next question is: Will LDK Solar (OTC:LDKYQ) be the next to bite the dust?

Suntech Power was once the world's largest solar power manufacturer but once it's restructured it looks like it will be nothing more than a company selling and installing solar panels. Here's a review of how we got here.

  • March 16, 2013: Suntech Power defaults on $541 million of U.S. convertible bonds.  
  • March 20, 2013: Suntech's largest subsidiary -- Wuxi Suntech -- is forced into bankruptcy by eight Chinese banks.  
  • Oct. 31, 2013: Investors holding $1.6 million of bonds defaulted on by Suntech Power file for involuntary bankruptcy.
  • Nov. 3, 2013: Suntech agrees to sell Wuxi Suntech assets to Shunfeng Photovoltaic International for $492 million.  
  • Nov. 6, 2013: Suntech Power filed an application for a provisional liquidation in the Cayman Islands, where the company is incorporated.  

Whew, got all that?

In the end, Suntech is looking to liquidate its business instead of going through bankruptcy, which is essentially the same thing. The new company would have to shift strategies drastically because after the sale of the Wuxi Suntech assets there's little manufacturing capacity left for Suntech Power.

Preliminary filings suggest that Suntech is looking to become a seller and distributor of solar equipment. It will reportedly still have its sales and distribution business after the Wuxi Suntech deal, along with 140 MW of solar project in Europe, which have been a headache of their own.

What's unknown is what assets will be liquidated, how much they'll be sold for, how much equity bondholders would get in a restructuring, and if the remaining company could return to solvency because currently it isn't solvent by Suntech's own admission.

A warning for solar investors
I've been saying it for over six months, but I see little upside in shares of Suntech Power at this point. There are too many unknowns and too few attractive assets to buy shares, even if the company somehow avoids bankruptcy.

This is also a warning to investors in LDK Solar (OTC:LDKYQ). The company began skidding down the same path as Suntech when it partially paid back debt due in April. The issue cam to a head when it missed a larger payment due in August and said it plans to restructure.

LDK Solar actually has less ability to pay debt holders or shareholders because of its low sales levels and massive losses. I'd stay away from Suntech Power but LDK Solar may actually be a worse company than Suntech at this point.