This post was updated at 1:17 p.m. EST to include additional details from court documents.
Shares of SunEdison (SUNE) fell more than 30% on Friday and traded below $1.40 after the renewable-energy company was temporarily blocked from transferring assets by New York State Supreme Court Justice Charles Ramos.
On Thursday, Judge Ramos issued a temporary restraining order on SunEdison and its yieldco, TerraForm Power (TERP), that blocks the company from "concealing, transferring or removing their assets, accounts or other property" without "fair consideration" in order to protect an "eventual international arbitration award" against SunEdison, court documents stated.
The temporary restraining order expires on Feb. 25 and is tied to a petition Chilean-based Latin American Power, known as LAP, filed against SunEdison for the latter's failed takeover bid of the former. According to court documents, the parties entered into a purchase agreement on May 19, 2015. The LAP acquisition was intended to be financed by the IPO of another of SunEdison's yieldcos, TerraForm Global (GLBL).
Court documents say the transaction was expected to begin closing on Sept. 23, 2015, but the expected wire payments never came. LAP, along with other petitioners, allege SunEdsion "willfully breached" its purchase agreement with LAP and "failed to satisfy its payment obligations." The petitioners seek damages from SunEdsion for no less than $150 million.
On the temporary restraining order, a spokesperson from SunEdison emailed Real Money the following statement:
"We appreciate the constructive hearing and the judge's thoughtful approach, confirming that we can continue to conduct our business without undue interference. This includes the transfer of assets for fair consideration in the ordinary course of business, which conforms to the existing policies of both companies. The judge's order will remain in place pending a hearing on Feb. 25 and does not affect either company's ability to conduct normal business operations."
SunEdison is also embroiled in another lawsuit brought by Appaloosa Management, alleging SunEdison breached its fiduciary duty to TerraForm Power in the former's announced plans to acquire Vivint Solar (VSLR).
