From the St. Louis Business Journal
A disgruntled SunEdison shareholder has filed a lawsuit against the Maryland Heights-based renewable energy developer, alleging the company’s seemingly bright future was “built on a house of cards.”
The suit, filed Monday in U.S. District Court for the Eastern District of Missouri by shareholder Dina Horowitz, names SunEdison President and CEO Ahmad Chatila and CFO Brian Wuebbels as defendants. The suit, which seeks class-action status, alleges Chatila and Wuebbels sold investors on SunEdison’s growth — mainly through the formation of its two yieldcos and a string of acquisitions totaling billions of dollars — even though they knew their business plan was unsustainable.
“As a result of the dissemination of aforementioned false and misleading reports, releases and public statements, the market price of SunEdison stock was artificially inflated throughout the Class Period,” defined as between June 16 and Oct. 6.
SunEdison officials declined to comment on the litigation. Horowitz’s attorney, St. Louis-based James Rosemergy of Carey Danis & Lowe, did not immediately return a call seeking comment.
SunEdison last year had become a Wall Street darling, as the company gobbled up hundreds of energy projects around the world to fill its backlog. It told investors the company would eventually sell those projects to its two yieldcos — TerraForm Global and TerraForm Power — to make money.
However, the plan didn’t go smoothly, and SunEdison’s stock between June and October of this year declined 72 percent before the company announced a 15 percent staff reduction and corporate restructuring that relied less on yieldco deals.
“The company seemed poised for great things, offering a business plan designed to build growth in the alluring alternative energy market,” the suit said. But that growth, the lawsuit said, was built on a “house of cards being propped up by false statements and omissions” by SunEdison leadership.
Horowitz is seeking a jury trial for all of her claims, which allege violations of the Securities and Exchange Act of 1934. Horowitz seeks compensatory damages and injunctive relief against the defendants.
Recently, Chatila announced the company was shying away from India — a country it had previously pegged for growth — and backing out of an acquisition agreement to buy Continuum Wind Energy Limited, Singapore, which has more than 1,000 megawatts of wind power assets in India. The failed acquisition is the second for SunEdison in as many months. In October, Latin American Power walked out on a planned $700 million deal because it said SunEdison failed to make a roughly $400 million upfront cash payment.
Analysts, meanwhile, have hinted at potential bankruptcy in the company’s future.
In early Tuesday trading, SunEdison stock (NYSE: SUNE) was trading at about $3.32 a share, well below its 52-week high of $33.45 a share and near an all-time low of $1.72 set in 2012.