On July 28, 2016, Pomerantz LLP was appointed Lead Counsel in a class action against TerraForm Power Inc. ("TerraForm" or the "Company") and certain of its officers. The class action, filed in United States District Court, District of Maryland, and docketed under 16-cv-00981, is on behalf of a class consisting of all persons or entities who purchased TerraForm securities between May 7, 2015 and March 15, 2016 inclusive (the "Class Period"). This class action seeks to recover damages against Defendants for alleged violations of the federal securities laws under the Securities Exchange Act of 1934.
TerraForm owns and operates solar and wind generation assets serving utility, commercial, and residential customers.
TerraForm was founded in 2014. The Company was formerly known as SunEdison Yieldco, Inc. and changed its name to TerraForm Power, Inc. in May 2014.
TerraForm's controlling shareholder is SunEdison, Inc. ("SunEdison"), and there is significant overlap between the management of TerraForm and SunEdison and SunEdison's other affiliates: Brian Wuebbels ("Wuebbels"), TerraForm's former Chief Executive Officer ("CEO"), has served as Chief Financial Officer ("CFO") and Executive Vice President of SunEdison since May 2012 and as SunEdison's Chief Administrative Officer since December 2014; Rebecca Cranna ("Cranna"), TerraForm's CFO, has served as SunEdison's Senior Vice President and CFO of Global Asset Management since 2014; and defendant Carlos Domenech Zornoza("Domenech"), TerraForm's former CEO, served as Executive Vice President of SunEdison from November 2009 to January 2014, and has held management positions at other SunEdison affiliates, including SunEdison Capital, LLC and SunEdison LLC.
The complaint alleges that throughout the Class Period, defendants made materially false and misleading statements regarding the Company's business, operational and compliance policies. Specifically, defendants made false and/or misleading statements and/or failed to disclose that: (i) TerraForm's Management Services Agreement with SunEdison exposed TerraForm to risks associated with SunEdison's internal financial controls and any deficiencies therein; (ii) consequently, TerraForm lacked effective internal financial controls; and (iii) as a result of the foregoing, TerraForm's public statements were materially false and misleading at all relevant times.
On February 29, 2016, SunEdison announced that it was delaying the filing of its fiscal year 2015 Form 10-K with the SEC, citing "(1) the need to complete all tasks and steps necessary to finalize the annual financial statements and the other disclosures required to be included in that filing, and (2) ongoing inquiries and investigations by the Audit Committee . . . relating to allegations concerning the accuracy of SunEdison's anticipated financial position." SunEdison stated that it expected to file its Form 10-K by March 15, 2016.
On February 29, 2016, TerraForm also announced that it was delaying the filing of its fiscal year 2015 Form 10-K with the SEC and also expected to file the Form 10-K by March 15, 2016. TerraForm cited only "the need to complete all steps and tasks necessary to finalize the Company's annual financial statements and other disclosures required to be in the filing."
On March 16, 2016, SunEdison announced a further delay in the filing of its Form 10-K beyond the extended due date of March 15, 2016, after "the identification by management of material weaknesses in its internal controls over financial reporting."
On March 16, 2016, TerraForm also announced a further delay in the filing of its Form 10-K beyond the extended due date ofMarch 15, 2016, after identifying material weaknesses in its internal controls over financial reporting.
On this news, TerraForm stock fell $0.83, or 7.87%, to close at $9.72 on March 16, 2016.