Vivint Solar sues SunEdison for damages

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Late last night U.S. time, Vivint Solar revealed that it has initiated a lawsuit against SunEdison over the company’s alleged “willful” breach of the merger agreement. In a filing with U.S. financial regulators, Vivint states that it is seeking damages “for the benefits its stockholders expected in connection with the transaction” as well as attorney’s fees.

The exact amount of the damages is to be determined at trial.

In addition to Vivint’s filing, SunEdison has broken its silence on the termination of the agreement by filing a brief form with financial regulators. SunEdison’s SEC filing provides little information that Vivint had not already released, however one detail that emerges in both filings is that SunEdison had failed to obtain financing for the deal.

This suggests that a lawsuit by Hedge Fund Manager David Tepper’s Appaloosa Management may have derailed the acquisition. Tepper owns a 9.5% stake in SunEdison yieldco TerraForm Power and had sued to prevent SunEdison from transferring Vivint’s assets to TerraForm. These assets were to act as collateral for a Goldman Sachs loan to finance the acquisition.

Appaloosa’s lawyers notified the press on February 29 that the judge presiding over its suit had warned Goldman Sachs that he retained the option of stopping the transfer of assets.

For its part, Vivint notes that SunEdison’s ability to obtain financing was not a condition of the merger agreement. However, the uncertain liquidity position of SunEdison has caused Deutsche Bank to suspend ratings of the company’s stock.

SunEdison claims that it had been in negotiations with Vivint over the potential termination of the acquisition, but that it is unsure what will become of these following Vivint’s decision to file suit.