This securities lawsuit alleges that the Registration Statement and Prospectus related to an initial public offering (IPO) of TerraForm Global contained materially incorrect or misleading statements and omitted material information that was required by law to be disclosed, ultimately resulting in losses to the plaintiff and prospective class members.
What investors are part of this class action? The class period is defined as all persons who purchased share of TerraForm Global common stock that were issued pursuant and/or traceable to the Registration Statement and the June 31, 2015 IPO. These shares trade on the NASDAQ under the symbol GLBL.
Procedural status: This lawsuit was filed on October 29, 2015 and is captioned Beltran v. TerraForm Global, Inc., et al. It was filed in the United States District Court for the Northern District of California. Its civil docket number is 3:15-cv-04981-WHO. The lead plaintiff deadline is December 28, 2015.
Defendant TerraForm Global owns and operates renewable energy generation assets worldwide. The company generates electricity through solar, wind and hydro-electric projects and serves utility, commercial, industrial and governmental customers. TerraForm Global holds wind and solar projects in South Africa, India and China, and plans to target additional markets in Brazil, Honduras, Costa Rica, Thainland, Malaysia, Uruguay and Peru. Correspondence from the SEC regarding TerraForm's IPO was sent to IPO sponsor and the company's controlling entity, SunEdison, Inc. at its Belmont, California headquarters.
The plaintiff in this action purchased shares of TerraForm Global common stock issued pursuant and/or traceable to the Registration Statement and June 31, 2015 IPO, and is alleging damages sustained as a result. Specifically, plaintiff states that the Registration Statement and Prospectus related to the IPO failed to disclose a number of problems that seriously undermined TerraForm Global's business and prospects. It is alleged that statements made were materially untrue, inaccurate, misleading and incomplete becacuse they did not reveal that IPO sponsor SunEdison was experiencing unprecedented losses that would be revealed just after the IPO was finalized, that SunEdison was having severe liquidity and debt issues that ended its ability to develop projects for TerraForm and that previously announced aggressive growth plans for the entities were unachievable.
According to the plaintiff, the truth concerning the nature and extent of these issues did not start to publicly emerge until the IPO was complete. On August 6, two days after its closing, SunEdison reported a net loss of $0.93 per share compared to estimates of $0.55 per share. That same day, a well-known financial media outlet reported that SunEdison's $11 billion in debt and negative cash flow would present obstacles to building the "renewable energy powerhouse" promised. On September 27, that same outlet reiterated concerns about SunEdison's excessive debt. TerraForm stock prices dropped on each of these occurrences.
On October 5, after market close, SunEdison filed a Form 8-K announcing that it would lay off roughly 15% of its employees and incur restructuring charges between $30 and $40 million. On October 6, renewable energy developer Latin American Power walked away from its sale to SunEdison because it did not receive a $400 million upfront cash payment as promised, further evidencing SunEdison's liquidity problems. On October 7, SunEdison revised down its installation projects for 2016 and said it did not expect to sell any projects through next year to TerraForm Global.
As a result of the misstatements and omissions concerning these issues in connection with the TerraForm IPO, the price of TerraForm Global shares has continued to fall far below its $15.00 per share offering price. In fact, it has plummeted by over 49% since its offering. As of October 28, shares closed at $7.52 per share, representing significant losses to plaintiff and prospective class members.
The plaintiff is now seeking on behalf of himself and other similarly situated class members compensatory damages, pre- and post-judgment interest, as well as reasonable attorney fees and costs associated with bringing this action.
This case is in the notice period. When a shareholder brings suit under certain federal securities laws, generally that shareholder must give notice via a press release. This notice starts a sixty-day period of time when any shareholder can investigate the underlying claims of the lawsuit and then elect to bring suit as well. At the end of this sixty-day period, the court appoints one shareholder (or a group of shareholders) to prosecute the securities litigation. We will continue to review the docket and update this page as warranted.