The U.S. Bankruptcy Court in New York has reportedly turned down Vivint Solar’s lawsuit against SunEdison regarding what Vivint called a “willful breach” of contract by now-bankrupt SunEdison following the companies’ canceled merger agreement.
According to coverage from the Wall Street Journal, Judge Stuart M. Bernstein said Vivint did not “make a prima facie showing that its claim must be liquidated immediately or within a short (or any) time frame whether here or in Delaware Chancery Court.”
In turn, says the report, the judge “rejected Vivint’s call to lift the automatic stay shielding SunEdison from hostile litigation” while SunEdison’s bankruptcy case plays out. (The company filed for Chapter 11 bankruptcy in April.)
Earlier this year, Vivint terminated a planned $2.2 billion merger deal with SunEdison. The solar company claimed that SunEdison failed to consummate the merger when required pursuant to the terms of the agreement. In turn, Vivint launched a lawsuit in the Court of Chancery of the State of Delaware over the breached agreement; in addition, the company was seeking damages to stockholders.
Gregory Butterfield, then-president and CEO of Vivint Solar, said in March, “SunEdison has willfully breached its obligations under the merger agreement, and we intend to pursue Vivint Solar’s remedies vigorously.” (Butterfield stepped down from his executive role a couple months later.)
The WSJ report, which says Vivint claimed damages totaled a whopping $1 billion, notes that if the lawsuit had gone through, Vivint could have had “significant bargaining power” in the reorganization of SunEdison.
The full coverage can be found here.