Last June, two dozen SunEdison Inc. senior managers gathered at the Park Hyatt near Paris’s Place Vendôme to hear a forecast from Chief Executive Ahmad Chatila. By 2020, he said, the renewable-energy startup would be worth more than $350 billion. Some day it would be as big as Apple or Google.

The bravado was vintage Chatila, but the fuel came straight from Wall Street. Born out of financial engineering that supercharged its growth, SunEdison had taken advantage of low interest rates and a flood of hedge-fund cash to transform itself into a darling of the clean-energy world.

Ten months later, SunEdison is working with advisers on a possible bankruptcy filing, according to people familiar with the matter. Nearly $10 billion in shareholder value has evaporated.

The story of SunEdison’s swift rise and calamitous fall, pieced together from internal documents, regulatory and court filings and interviews with more than a dozen current and former employees and advisers, shows what can happen when executive overreach meets fizzy markets. Mesmerized by the promise of high yields and fast growth, investors turned a blind eye to operational warning signs that ultimately left the company vulnerable to a rise in interest rates.

Last fall, several senior executives warned the board about a looming liquidity crisis and urged the ouster of Mr. Chatila, say people familiar with the matter. In the ensuing weeks, they quit or were fired.