Clean energy giant SunEdison, which has been on a spectacular rise and fall over the past year, is being sued by a company it previously had a deal to buy. It’s the latest in a stream of lawsuits from shareholders and former partners.
This week, the shareholders of Latin America Power sued SunEdison in an attempt to get access to SunEdison’s assets of $150 million. Latin America Power, which owns and builds wind and hydro farms across South America, says it’s owed $150 million after SunEdison walked away from a deal to acquire it last October.
The suit contends that SunEdison, which once was on a spectacular acquisition binge, is now “teetering on the edge of bankruptcy.” The company has since pulled back from some of the companies it once was in the works to acquire.
On Thursday the judge in the case granted Latin America Power a temporary restraining order, essentially stopping SunEdison from shifting the assets outside of its ordinary course of business. The judge will later decide whether or not to make that a permanent order. “We’re pleased with the judge’s decision to grant a temporary restraining order, and look forward to continuing to bring our claims in arbitration,” said Tai-Heng Cheng, Partner with Quinn Emanuel Urquhart & Sullivan, the firm representing Latin America Power.
SunEdison had a different take on the judge’s decision and released this statement: “We appreciate the constructive hearing and the judge’s thoughtful approach, confirming that we can continue to conduct our business without undue interference. This includes the transfer of assets for fair consideration in the ordinary course of business, which conforms to the existing policies of both companies.”
Earlier this year billionaire hedge fund manager David Tepper, and his fund Appaloosa Management, sued SunEdison in an attempt to stop the company from closing on one of its biggest planned purchases: Vivint Solar. At the time, Reuters reported that Appaloosa owned 9.5% of SunEdison subsidiary TerraForm Power’s outstanding class A shares.
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Tepper has alleged that SunEdison is using TerraForm Power to hide it’s dwindling cash. Latin America Power alleges that SunEdison is shielding assets, which is why its seeking a court order to access the assets.
SunEdison’s (SUNE) stock has plunged from a high of $33.45 last summer to $2.14 in trading on Thursday.
This post was updated on Thursday and Friday to incorporate SunEdison and Latin America Power’s legal counsel’s comments.