Shady Solar Investments? Thursday, February 03, 2022
University of California Sues 8minute Solar, Seeking $1.22 Billion
Wall Street Journal, Luis Garcia, 1-31-22
The University of California system is suing 8minute Solar Energy LLC and Tom Buttgenbach, its co-founder and chief executive, seeking roughly $1.22 billion over the university’s investment in several renewable-power projects. The public university’s regents allege that 8minute and Mr. Buttgenbach fraudulently induced it to invest $150 million in a collection of projects in early 2020, then Mr. Buttgenbach misappropriated much of the capital and used it to enrich himself, in a lawsuit brought last month in Alameda County Superior Court in Alameda, Calif.
The university made the investment from its roughly $170 billion in assets, which include pension funds and endowments. The lawsuit said that the university is seeking compensation for $405 million in lost returns, and that under California law damages can total three times the amount lost, in this case $1.22 billion.
In a motion filed Jan. 13 in response to the regents’ complaint, lawyers for Mr. Buttgenbach and 8minute said the regents’ allegations were frivolous and have been the subject of an arbitration proceeding initiated by co-investors in the projects. The lawsuit is an “attempt at a do-over” of the arbitration, the lawyers said. In the motion, the lawyers for Mr. Buttgenbach and 8minute asked the court to dismiss the lawsuit and order the regents to join the arbitration under way. A hearing on those requests is set for April 13 in the court near Oakland.
The projects involved include solar facilities in California, Texas and Nevada. They are in various stages of development by 8minute, which has sold most of them as planned. According to the lawsuit, Mr. Buttgenbach allegedly said in January 2020, when discussing an investment by the university, that 8minute would sell the projects within 18 months. A joint venture formed by the company and the investors would earn development fees from those projects after they were sold. Mr. Buttgenbach, however, delayed the sale of some of the projects, according to the lawsuit, which alleged that he had engineered a financial crisis to create a deadlock among his backers that would enable him to seize the investors’ interests in the projects, including the university UCLA Faculty Association Blog: First Quarter 2022
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