The legal woes are mounting for SunEdison Inc.
Two creditors filed a lawsuit Sunday against the struggling
company’s TerraForm Power Inc. holding company seeking $231 million
related to an acquisition last year. Also Sunday, SunEdison’s TerraForm
Global Inc. yieldco filed a separate suit over renewable-energy projects
in India.
D.E. Shaw & Co. LP and Madison Dearborn Capital Partners
IV LP say the funds in the TerraForm Power matter are owed as deferred
payment for SunEdison’s $1.9 billion purchase of First Wind Holdings LLC
in January 2015, and will be due “immediately” if SunEdison files for
bankruptcy or restructures its debt, according to the suit filed in the
Supreme Court of the State of New York.
First Wind was one of SunEdison’s biggest purchases, and
made it the world’s biggest renewable-energy company. It was part of a
massive buying spree that racked up $11.7 billion in debt by the end of
September and helped
drive the company to the edge of failure.
“By all reports, SunEdison is on the verge of bankruptcy,”
D.E. Shaw and Madison Dearborn said in the suit. “That bankruptcy will
trigger substantial contractual payment obligations.”
First Wind
Under the First Wind deal, SunEdison and TerraForm Power
bought 500 megawatts of operating wind farms, 21 megawatts of operating
solar farms and 1.6 gigawatts of development-stage projects. They
deferred about $510 million in earn-out project payments, and about $231
million of that amount remains unpaid. That’s the amount D.E. Shaw and
Madison Dearborn Capital are seeking from TerraForm Power, which also
was one of the buyers and shares responsibility for the debt, according
to the suit.
“During the fall of 2015, SunEdison failed to make timely
earn-out project payments and indicated that it would not comply with
its obligations,” according to the suit. D.E. Shaw and Madison Dearborn
Capital notified SunEdison and TerraForm Power Nov. 18 that this would
lead to an “acceleration event” that would make TerraForm Power
responsible for the entire amount.
The suit comes less than a week after TerraForm Global
revealed in a filing that SunEdison may “soon seek bankruptcy protection.” TerraForm Power
echoed that in a regulatory filing Monday.
Ben Harborne, a SunEdison spokesman, declined to comment on
pending litigation, as did spokesmen for TerraForm Power and TerraForm
Global.
India Projects
Separately, TerraForm Global sued parent SunEdison in a
dispute over $231 million in funds transferred in connection with
renewable-energy projects in India.
SunEdison officials said in November that they sought the
transfer of funds from TerraForm Global to complete the Indian projects,
according to TerraForm Global’s suit filed in Delaware Chancery Court
late Friday. Once completed, the Indian projects would be owned by
TerraForm Global, the filing said.
“In fact, the projects were underfunded and behind schedule
and SunEdison instead diverted the funds to prop up its flagging
liquidity position,” TerraForm Global officials said in the suit.
TerraForm Global is asking a judge to have its interests in
the Indian projects protected through a trust and seeks an undetermined
amount of monetary damages from SunEdison.
SunEdison is
seeking to sell as much as 1 gigawatt of unfinished projects in India, say people familiar with the matter.
The case involving the First Wind deal is D.E. Shaw
Composite Holdings LLC v. TerraForm Power LLC, 651752/2016, New York
State Supreme Court, New York County. The other case is TerraForm Global
Inc. v. SunEdison Inc., No. 12159, Delaware Chancery Court
(Wilmington).
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