The renewable energy holding company said it will takesteps to improve corporate governance and separate itself from , its bankrupt sponsor,as part of a settlement agreement with investors.
The agreement resolved a stockholder derivative suit filedby Appaloosa Investment Ltd.Partnership I, as well as derivative claims by shareholders,related to TerraForm Power's role in SunEdison's for the rooftop solar companyVivint Solar Inc.
With TerraForm Power continuing to investigate whether controldeficiencies at SunEdison impacted its own financial results, the yieldco onSept. 27 said it will separate certain information technology systems from itssponsor and look to appoint another independent director to its board.Terraform Power will also put its COO, Thomas Studebaker, in charge of ordinarybusiness operations for two years or until SunEdison sells its controllinginterest, whichever comes first.
"Over the course of 2016, the TerraForm Powerindependent directors and management team have taken significant action tostrengthen the Company and separate it from SunEdison," Chairman andInterim CEO Peter Blackmore said in a news release. "This settlement isconsistent with our approach of operating independently and we are pleased tohave reached an agreement with Appaloosa that we believe is in the bestinterests of the Company and all TerraForm Power stockholders."
David Tepper's AppaloosaManagement LP started raising concerns about SunEdison in late2015, when the project developer, struggling to stay afloat, its then finance chief to headTerraForm Power and its other publicly traded yieldco, The move tobind the family of companies closer together shifted SunEdison's "financialstress" onto the holding companies while providing "little apparentbenefit" to shareholders, Appaloosa said in a letter at the time.
In January, Appaloosa Investment Ltd. Partnership Isued to blockTerraForm Power from buying residential solar assets to help fund SunEdison'splanned takeover of Vivint Solar. The deal later fell apart when SunEdison lostbank funding.
After SunEdison filed for Chapter 11 protection U.S.Bankruptcy Court for the Southern District of New York in April, Appaloosacalled for awide-ranging investigation of the developer's pre-bankruptcy dealings.
Now, Appaloosa Management and are partnering on anoffer to buy out SunEdison's stake in TerraForm Power. At least two otherpotential bidders arereportedly interested in the yieldco.