TerraForm Global has filed a lawsuit against its parent company, troubled clean energy firm SunEdison, claiming that SunEdison misappropriated funds intended to complete renewable energy projects in India.
In the lawsuit, the subsidiary charges that it gave SunEdison $231 million in cash to complete certain India-based projects and deliver them on schedule, but instead, SunEdison “diverted the funds to prop up its flagging liquidity position rather than to fund the projects in India as promised.”
According to the filing, the projects were left under-funded and behind schedule as a result.
The lawsuit asserts that after SunEdison spent the $231 million “to suit its own needs,” the parent company told its subsidiary that the assets could only now be completed and transferred if it provided additional funding.
Consequently, TerraForm Global is accusing SunEdison of breach of contract, breach of fiduciary duty and unjust enrichment.
TerraForm Global specifically named SunEdison CEO Ahmad Chatila, General Counsel Martin Truong, and former Chief Financial Officer Brian Wuebbels in the suit, claiming that they breached their fiduciary duty.
When reached for comment, a SunEdison spokesperson said the company doesn’t discuss pending litigation, and a TerraForm Global spokesperson simply said, “The lawsuit speaks for itself, and the company will not comment further.”
This filing comes shortly after TerraForm Global said in a regulatory filing that its parent company is facing “liquidity difficulties” and that there is “substantial risk that SunEdison will soon seek bankruptcy protection.”
This is just the latest legal woe for SunEdison; the company is also reportedly being probed by the U.S. Securities and Exchange Commission and the U.S. Department of Justice regarding its cancelled acquisition of Vivint Solar. In March, Vivint Solar terminated the merger agreement and announced it would seek damages.
Separately, Madison Dearborn Partners LLC and D.E. Shaw Group subsidiaries have filed a lawsuit against TerraForm Power, another SunEdison yieldco. According to a Reuters report, the plaintiffs are seeking to ensure that, if SunEdison does, in fact, declare bankruptcy, TerraForm Power would pay the approximately $230 million still owed from SunEdison and TerraForm’s acquisition of developer First Wind last year.
Citing court documents, Reuters says SunEdison hasn’t made “timely payments” and that TerraForm denies responsibility.
