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 Two dozen legal claims have been made since the beginning of the
year against SunEdison <SUNE.N> and its executives, mainly from
shareholders who claim the company misled them about its financial
position, a review of cases on Westlaw showed.
None of the lawsuits reviewed have yet been adjudicated, nor have
the claims been validated. Most are too recent for SunEdison to have
filed a response to, and the company did not respond to requests for
comment.
SunEdison also faces a major lawsuit from solar installer Vivint
Solar Inc <VSLR.N> for failing to complete its $1.9 billion
acquisition of the company. In its annual filing in March last year
it disclosed only two significant lawsuits.
Roughly half a dozen suits filed since February for breach of
contract claims from partners and suppliers offer a window into the
reach of SunEdison. In just a few years, the maker of silicon
"wafers" for solar cells has transformed itself into the world's
fastest growing renewable energy developer, taking on projects as
small as a family home or as big as a desert solar array.
SunEdison's shares have fallen about 98 percent over the past 12
months. It faces a cash crunch, a $12 billion debt pile, and
scrutiny from U.S. regulators over a failed deal, among other
issues. [ID: nL3N1735EJ]
The breadth of partner lawsuits showed the results of an "out of
control shopping spree" in 2014 and 2015, said Pavel Molchanov, an
analyst who follows the solar industry for Raymond James.
"This was expansion on steroids and obviously we are seeing how that
movie is ending very badly because the company is struggling to keep
up with its bills," Molchanov said.
The claims themselves are still being adjudicated, and the number is
not unusually high for a bankruptcy, but the variety of claimants
indicates nervousness among creditors, said Rick Antonoff, a
bankruptcy attorney with Blank Rome LLP, who is not involved in
SunEdison cases.
Westlaw did not show responses from SunEdison in the partner and
supplier cases, aside from one request for time.
The company is expected to file for Chapter 11 bankruptcy protection
within weeks, the Wall Street Journal reported.
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Clients big and small are seeking payments. Western, Massachusetts
based Valley Home Improvement Inc says it is owed $37,000 for
installing solar panels on two homes, while temporary staffing firm
Aerotek Inc on Friday alleged SunEdison failed to pay more than $1
million at projects in Colorado, California and elsewhere.
And Silicon Valley green energy investor Vinod Khosla's firm, Khosla
Ventures, and venture capital firm Sigma Partners and Fortis
Advisors sued SunEdison in March for allegedly stopping payments for
its 2013 acquisition of solar heating startup EchoFirst Inc.
Khosla and partners say SunEdison owes $6 million on the $27.5
million deal.
Suppliers are also lining up, particularly those that provided
materials to the Pasadena, Texas polysilicon plant that SunEdison in
February said it would close.
ECKA Granules of America LLC, which makes aluminum powder used to
make solar cells in March claimed $1.4 million. It said SunEdison
has not returned two railcars used to deliver powder.
Suppliers want to collect as much as possible before bankruptcy,
said attorney Antonoff. They are "being proactive in taking action
now to collect rather than waiting around to see what SunEdison
does,” he said.
(Editing by Peter Henderson and Andrew Hay)
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