Already suffering from crushed stock prices and a lawsuit by a hedge fund manager, SunEdison is now on the receiving end of another lawsuit. On Wednesday afternoon Bloomberg reported that shareholders of Latin American Power are suing SunEdison in New York courts over the canceled deal to buy the company.
SunEdison dropped the acquisition of Latin American Power last fall by letting a September 30 deadline pass, and both parties accused the other of failing to meet conditions. In December SunEdison also declined to purchase a portfolio of projects from another Latin American renewable energy developer, Renova Energia.
Latin American Power shareholders are asking for the court to intervene to protect SunEdison assets, which they say the company is trying to hide, while seeking $150 million in damages. The shareholders allege that SunEdison is close to bankruptcy, and say that court intervention is needed as the company may go bankrupt before arbitration can be completed.
SunEdison was quick to respond to the suit. "We believe the lawsuit is without merit and we plan to vigorously contest it," SunEdison Senior Marketing Manager Ben Harborne told pv magazine.
The companys stock price has fallen over 90% in value since last summer, when SunEdison announced that it would buy Vivint Solar, the second-largest residential solar installer in the United States. However, the company also reported $1.4 billion in cash and a booming project business in third quarter results, its most recent.
Mercom Capital CEO Raj Prabhu says that the claims that SunEdison is on the edge of bankruptcy are not something new, and notes that the company continues to access financing from institutional investors. He also says that it would be difficult for a public company to hide assets.
Prabhu further cautions about reading too much into stock prices as an indicator of financial health. The whole global stock market is weak right now, Prabhu told pv magazine.
Update: This article was updated at 2:30 PM EST on February 11 to include a response by SunEdison.