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SunEdison's troubles come home as own yieldco sues it for $231m

The SunEdison family has at last turned against itself publicly, with TerraForm Global, a yieldco launched last year to focus on developing economies, suing SunEdison for $231m plus damages.

In a lawsuit filed in a Delaware court, TerraForm Global claims it prepaid parent SunEdison $231m late last year to help it finish a series of renewables projects in India. The completed projects were to be transferred to TerraForm Global.

SunEdison executives told TerraForm Global that the projects were "substantially completed" and, with the money in hand, it would be able to deliver them on time, the lawsuit says.

But in reality the projects were "underfunded and behind schedule", and SunEdison "instead diverted the funds to prop up its flagging liquidity position".

A large chunk of TerraForm Global's money was improperly used by SunEdison in November to repay a margin loan "mere minutes" before it came due, the yieldco claims.

In the meantime, SunEdison has informed its yieldco that the India projects cannot be completed unless it receives even more money. TerraForm Global claims that SunEdison faces unpaid vendor bills in India, and the projects in question require at least another $73m to be built.

Recent press reports suggest a number of potential buyers are interested in snapping up SunEdison's India portfolio, including the Adani Group.

TerraForm Global also says SunEdison failed to drop down renewables projects in Uruguay on time, for which it was already compensated with shares of the yieldco issued at the time of its IPO.

Construction at those projects has ceased entirely, the yieldco says.

Saddled with $11.7bn in debt and a market capitalisation that has shrunk to $40m, SunEdison is preparing to file for Chapter 11 bankruptcy in the US, according to recent press reports.

That means a host of creditors and former business partners will be making claims on the company's remaining assets.

It emerged recently that two former business partners, D.E. Shaw and Madison Dearborn Capital Partners, are suing SunEdison's other yieldco, TerraForm Power, saying they are still owed money from SunEdison's acquisition of Boston-based First Wind more than a year ago.

TerraForm Global's lawsuit includes claims against SunEdison Inc., chief executive Ahmad Chatila, outgoing chief financial officer Brian Wuebbels, and general counsel Martin Truong.

Wuebbels, SunEdison's long-standing CFO, was also chief executive of both of the company's yieldcos until his sudden resignation from them last week. Wuebbels is expected to depart SunEdison any day.

TerraForm Global is asking for its $231m back, in addition to unspecified money damages from the defendants.

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