Cobalt Partners, LP, et al v. SunEdison, Inc. et al

Filing 151

TRANSFER ORDER (MDL. No 2742) - UNITED STATES JUDICIAL PANEL ON MULTIDISTRICT LITIGATION. The actions listed on Schedule A (3:16-cv-02263-WHA, 3:16-cv-02264-WHA, 3:16-cv-02268-WHA) and pending outside the Southern District ofNew York are transfer red to the Southern District of New York, and, with the consent of that court, assigned to the Honorable P. Kevin Castel for coordinated or consolidated pretrial proceedings. ***CAND Civil Case Terminated per MDL Transfer Order. (ecgS, COURT STAFF) (Filed on 10/6/2016)

Case MDL No. 2742 Document 98 Filed 10/04/16 Page 1 of 5

UNITED STATES JUDICIAL PANEL
on
MULTIDISTRICT LITIGATION

MDL No. 2742

IN RE: SUNEDISON, INC., SECURITIES LITIGATION

TRANSFER ORDER

Before the Panel:* Plaintiff the Municipal Employees' Retirement System of Michigan,
which is the court-appointed lead plaintiff in the Eastern District ofMissouri Horowitz action, moves
under 28 U.S.C. § 1407 to centralize fifteen actions in the Southern District of New York. This
litigation arises out of the operation and demise ofSunEdison, Inc., a company engaged in renewable
energy development - the financing, construction and operation of solar, wind and hydroelectric
power plants- throughout the world. The actions, which are listed on the attached Schedules A and
B, are pending in the Northern District of California (ten actions), the Eastern District of Missouri
(three actions), the District of Maryland (one action) and the Southern District of New York (one
action). The Panel has been informed of nine additional related federal actions. 1
Consolidated ERISA plaintiffs in the Eastern District of Missouri (plaintiffs in the Usenko
lead action and the Dull and Linton potential tag-along actions) and plaintiff in the Southern District
of New York Bloom action and potential tag-along action support plaintiffs motion. Defendants2
support centralization in the Southern District ofNew York but do not object to transfer to any of
the districts in which the actions are pending.
The remaining responding plaintiffs oppose centralization. Consolidated ERISA plaintiff
in the Eastern District ofMissouri Wheeler potential tag-along action opposes centralization, as does

Judge Marjorie 0. Rendell did not participate in the decision of this matter.
1

Those actions and any other related federal actions are potential tag-along actions. See
Panel Rules 1.1(h), 7.1, and 7.2.
2

Ahmad Chatila, Brian Wuebbels, Emmanuel Hernandez, Antonio R. Alvarez, Peter
Blackmore, Clayton C. Daley, Jr., Georganne C. Proctor, Steven Tesoriere, James B. Williams,
Randy H. Zwirn, Matthew Herzberg, Martin Truong, Jeremy Avenier, Alejandro Hernandez, and
Carlos Domenech Zornoza (collectively, the individual defendants); SunEdison, Inc. Investment
Committee, TerraForm Global, Inc., TerraForm Power, Inc.; and Barclays Capital Inc., BTG Pactual
US Capital LLC, Citigroup Global Markets Inc., Credit Agricole CIB, Credit Suisse, Deutsche Bank
Securities Inc., Goldman, Sachs & Co., Itau BBA USA Securities, Inc., J.P. Morgan Securities LLC,
Kotak Mahindra, Inc., Macquarie Capital (USA), Inc., MCS Capital Markets LLC, Merrill Lynch,
Pierce, Fenner & Smith Incorporated, Morgan Stanley & Co. LLC, Santander, SG Americas
Securities, LLC, and SMBC Nikko Securities America, Inc. (collectively underwriter defendants).

A CERTIFIED COPY
:RUB"\\ J. KRA11CK, CLERK

BY

!lw-11:!2~
Depu. Clerk

Case MDL No. 2742 Document 98 Filed 10/04/16 Page 2 of 5

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plaintiff in the District of Maryland Chamblee action and the unopposed lead plaintiff movant in the
Eastern District of Missouri Church action. Plaintiffs in the Northern District of California Pyramid
Holdings action (the court-appointed lead plaintiff in the Terraform Global initial public offering
class cases) and in the Beltran action oppose centralization of the Terraform Global IPO cases and,
alternatively, suggest transfer to the Northern District of California. Terraform Global IPO plaintiffs
in the Northern District of California Iron Workers, Patel and Fraser actions also oppose
centralization and, alternatively, suggest transfer to the Northern District of California. Plaintiffs
in four non-class Northern District of California actions (Omega, Glenview, Cobalt and Oklahoma
Firefighters) oppose centralization of their actions and, alternatively, suggest transfer to the Northern
District of California.
On the basis of the papers filed and the hearing session held, we find that these actions
involve common questions of fact, and that centralization will serve the convenience of the parties
and witnesses and promote the just and efficient conduct of this litigation. The actions share factual
issues arising from allegedly inaccurate statements concerning SunEdison' s operational and financial
condition- e.g., its liquidity, classification of debt (roughly $750 million in debt was reclassified
from non-recourse to recourse debt in November 2015), and internal financial controls- and the
alleged impropriety of its public filings. The actions before us involve various transactions, offerings
and statements made in the roughly ten-month period before SunEdison filed for bankruptcy relief.
All actions- whether focused on statements made in the promotion of SunEdison' s or its affiliates ' 3
securities, important acquisitions such as SunEdison's failed purchase ofVivint or decisions made
regarding the SunEdison retirement plan- can be expected to tum on SunEdison's actual financial
condition during the relevant time period and what information regarding the company's financial
condition was disclosed to investors. Further, centralization will prevent inconsistent pretrial rulings
on class certification and other pretrial matters, and conserve the resources of the parties, their
counsel, and the judiciary.
Plaintiffs in most actions oppose centralization, largely focusing on the unique aspects of the
various types of actions, and the different securities, claims or defendants involved. While there are
differences in the focus of each group of actions, all actions contain similar allegations regarding the
financial condition of SunEdison in the months leading up to its bankruptcy. The internal financial
controls and financial reporting processes of the affiliates TERP and Terraform Global are alleged
to have been closely tied, via Management Services Agreements, to those of SunEdison. According
to plaintiffs, SunEdison provided them with most of their personnel, management, and operations.

3

SunEdison had two partially-owned affiliates known as "yieldcos"- Terraform Power
(TERP, which became publicly traded in July 2014), and Terraform Global (which held its initial
public offering in late-July 2015). Plaintiffs explain that yieldcos are public companies created to
purchase and own renewable energy projects developed by the sponsoring company, SunEdison.
The projects purchased by a yieldco generate revenue as power is sold to customers, and the yieldco
returns a portion of that revenue to its investors as dividends. TERP operates renewable energy
projects in the developed world, and Terraform Global was reportedly intended to serve as a
companion to TERPin emerging markets.

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-3In particular, the affiliates' executives- including the individual defendants in most actions- often
were or are SunEdison officers or directors. In light of this common factual backdrop and
overlapping defendants among the actions, we are persuaded that this litigation will benefit from the
framework provided by centralized proceedings for discovery and motion practice. The transferee
court can, of course, structure the pretrial proceedings so as to allow discovery with respect to
individual issues to proceed concurrently with pretrial proceedings on common issues, In re:
Ephedra Products Liability Litigation, 314 F. Supp.2d 1373, 1375 (J.P.M.L. 2004), and otherwise
ensure that pretrial proceedings are conducted in a streamlined manner leading to the just and
expeditious resolution of all actions to the overall benefit of the parties.

We often have centralized diverse litigation stemming from the conduct of large companies
that have entered bankruptcy. 4 For instance, in MDL No. 2338- In re: MF Global Holdings Ltd.
Investment Litigation, 857 F.Supp.2d 1378 (J.P.M.L. 2012), we centralized investor actions
alongside those brought by commodities futures customers in the district where defendants'
bankruptcy was pending. While some parties suggest that coordination among counsel may be
preferable to formal centralization, the sheer number of counsel involved in these cases make this
option challenging, if not unworkable. Moreover, the Securities and Exchange Commission and the
Department of Justice reportedly are investigating SunEdison's conduct, and centralization before
a single judge will facilitate coordination with any actions that may result.
Plaintiffs in the Northern District of California Cobalt, Glenview and Omega actions request
that we exclude their actions in light of their pending petitions for permission to appeal under
Section 1292(b) before the Ninth Circuit. See Cobalt Partners, LP, et al. v. SunEdison, Inc., et al.,
Appeal No. 16-80118 (91h Cir.). We deny that request. Given the overwhelming factual overlap of
these three actions with the other actions, we think it best that all actions be transferred immediately
so they can proceed in a coordinated fashion before a single judge.
We select the Southern District of New York as transferee district for this litigation. The
Southern District of New York is where SunEdison's Chapter 11 bankruptcy proceeding is
underway. We often have centralized litigation in the district in which a principal defendant's

4

See, e.g., In re: Enron Corp. Sec., Derivative & "ERISA" Litig., 196 F. Supp. 2d 1375,
13 7 6 (J .P .M.L. 2002) ("Whether the actions be brought by securities holders seeking relief under the
federal securities laws, shareholders suing derivatively on behalf ofEnron, or participants in Enron
retirement savings plans suing for violations of the Employee Retirement Income Security Act of
1974, all actions can be expected to focus on a significant number of common events, defendants,
and/or witnesses."); In re: WorldCom, Inc., Sec. & "ERISA" Litig., 226 F. Supp. 2d 1352, 1354
(J.P.M.L. 2002) (centralizing securities, ERISA and shareholder derivative actions because they
involved common "factual questions arising out of alleged misrepresentations or om1sswns
concerning WorldCom's financial condition and accounting practices").

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bankruptcy is pending. 5 Moreover, this district has the support of defendants and several plaintiffs.
Centralization in this district will facilitate coordination with the bankruptcy court on, inter alia,
discovery, indemnification and settlement issues. Further, given that many of the underwriter
defendants are based in this district, many potentially relevant documents and witnesses may be
found there.
IT IS THEREFORE ORDERED that the actions listed on Schedule A and pending outside
the Southern District ofNew York are transferred to the Southern District of New York, and, with
the consent of that court, assigned to the Honorable P. Kevin Castel for coordinated or consolidated
pretrial proceedings.

PANEL ON MULTIDISTRICT LITIGATION

Sarah S. Vance
Chair
Charles R. Breyer
Ellen Segal Huvelle
Catherine D. Perry

5

Lewis A. Kaplan
R. David Proctor

See, e.g., In re: Gen. Motors LLC Ignition Switch Litig., 26 F. Supp. 3d 1390, 1391
(J.P.M.L. 2014) (transferring actions to the Southern District of New York, where both General
Motors and Delphi bankruptcies were filed); In re: TelexFree Sec. Litig., 54 F. Supp. 3d 1353, 1354
(J.P.M.L. 2014) (transferring actions to district where TelexFree bankruptcy cases were filed).

Case MDL No. 2742 Document 98 Filed 10/04/16 Page 5 of 5

IN RE: SUNEDISON, INC., SECURITIES LITIGATION

MDL No. 2742

SCHEDULE A

Northern District of California
BELTRAN v. TERRAFORM GLOBAL, INC., ET AL., C.A. No. 5:15-04981
PYRAMID HOLDINGS, INC. v. TERRAFORM GLOBAL, INC., ET AL.,
C.A. No. 5:15-05068
COBALT PARTNERS, LP, ET AL. v. SUNEDISON, INC., ET AL.,
C.A. No. 3:16-02263
GLENVIEW CAPITAL PARTNERS, L.P., ET AL. v. SUNEDISON, INC., ET AL.,
C.A. No. 3:16-02264
OMEGA CAPITAL INVESTORS, L.P., ET AL. v. SUNEDISON, INC., ET AL.,
C.A. No. 3:16-02268
OKLAHOMA FIREFIGHTERS PENSION AND RETIREMENT SYSTEM v.
SUNEDISON, INC., ET AL., C.A. No. 5:16-02267
BADRI v. TERRAFORM GLOBAL, INC., ET AL., C.A. No. 5:16-02269
IRON WORKERS MID-SOUTH PENSION FUND v. TERRAFORM
GLOBAL, INC., ET AL., C.A. No. 5:16-02270
PATEL v. TERRAFORM GLOBAL, INC., ET AL., C.A. No. 5:16-02272
FRASER v. TERRAFORM GLOBAL, INC., ET AL., C.A. No. 5:16-02273
District of Maryland
CHAMBLEE v. TERRAFORM POWER, INC., ET AL., C.A. No. 8:16-00981
Eastern District of Missouri
HOROWITZ v. SUNEDISON, INC., ET AL., C.A. No.4: 15-01769
USENKO v. SUNEDISON, INC., ET AL., C.A. No. 4:16-00076
CHURCH v. CHATILA, ET AL., C.A. No. 4:16-00628
Southern District ofNew York
BLOOM, ET AL. v. SUNEDISON, INC., ET AL., C.A. No. 1:16-07427