(Reuters) - Solar panel installer Vivint Solar Inc (>> Vivint Solar Inc) said it would participate in SunEdison Inc's (>> Sunedison Inc) bankruptcy case to maximize its recovery from claims against SunEdison, which terminated its agreement to buy Vivint in March.

Vivint Solar has filed a lawsuit in Delaware against SunEdison alleging that the solar company willfully breached its obligations under their merger agreement and is seeking damages.

SunEdison's bankruptcy filing on April 21 has created a temporary stay on the prosecution of Vivint's lawsuit, the company said in a regulatory filing on Tuesday. (http://bit.ly/24I7wzT)

SunEdison, once the fastest-growing U.S. renewable energy company, filed for Chapter 11 bankruptcy protection after a short-lived but aggressive spate of debt-fueled acquisitions proved unsustainable.

Investors began to lose confidence in SunEdison's expansion, when the company announced a $2.2 billion deal to acquire Vivint in July.

The Vivint deal also led to a lawsuit by billionaire David Tepper's Appaloosa Management, which sued to block SunEdison's unit, TerraForm Power Inc (>> TerraForm Power Inc), from buying some Vivint assets.

(Reporting by Amrutha Gayathri in Bengaluru; Editing by Shounak Dasgupta)

Stocks treated in this article : TerraForm Power Inc, Vivint Solar Inc, Sunedison Inc