Alana Goodman of the Washington Free Beacon reports bad news for a company with big Biden administration backing.
A solar company that was approved for a $3 billion loan from the Biden administration last year is facing a class action lawsuit from investors who claim the company withheld troubling information about its business practices.
The lawsuit claims that Sunnova Energy “made materially false and misleading statements about its operations,” including its allegedly “predatory business practices against disadvantaged homeowners and communities.”
The news could raise new questions for the Department of Energy’s Loan Programs Office and Sunnova. The DOE has been facing scrutiny over the $3 billion loan since November, when the Washington Free Beacon reported on consumer complaints that accused Sunnova of ripping off elderly dementia patients.
Republican lawmakers on the Senate and House energy committees raised concerns with the DOE about the consumer complaints in December, noting that the loan is intended to help Sunnova expand its customer base to “disadvantaged homeowners and communities.”
The lawsuit says the inquiries led to a “precipitous decline” in Sunnova’s stock price, which tumbled 16 percent the day after Congress sent a letter to the DOE questioning the loan. The suit claims that Sunnova “failed to disclose material adverse facts” about its sales practices, which “subjected the company to a heightened risk of regulatory and/or governmental scrutiny, as well as significant reputational and/or financial harm.”
The lead plaintiff in the case, Ricardo Trindade, is an investor who reportedly purchased around 1,800 shares in Sunnova last July. The lawsuit was filed in the U.S. District Court for the Southern District of Texas.
Sunnova’s stock price plunged again in late February, after it announced a $100 million stock offering plan that spooked investors and raised concerns that the company was short on funds. Sunnova also reported a net loss of around $500 million last year, over twice as high as the year prior.
