First Solar Settles Shareholder Suit for $350 Million

First Solar will pay out $350 million in claims for a class
action lawsuit filed in 2012, according to a Monday announcement
from the Arizona-based solar panel manufacturer.

The suit alleged that First Solar executives and officers misled
shareholders between April 2008 and February 2012 about the extent
of financial damage related to a manufacturing hiccup.

Prior to the suit, First Solar had announced the discovery of a
defect that impacted 4 percent of panels it produced between June
2008 and June 2009. The company pledged to replace any faulty
panels distributed to customers and in subsequent quarters First
Solar logged the impact of those claims on its financials, which
generally hovered in the tens of millions.

But warranty-related expenses shot up to about $164 million in
Q4 2011. Shares responded with an 11 percent drop. The 2012 suit
alleged that First Solar failed to provide a clear picture of its
warranty-related costs “or recklessly disregarded them” in
financial filings. Between spring 2008 and winter 2012, First Solar
shares dropped nearly 90 percent. The timing of the lawsuit’s
allegations came amid dramatic changes in the global upstream solar
industry that saw numerous companies go bankrupt.

First Solar disputed the lawsuit’s claims, with the case set to
go to trial this month. Though the manufacturer undercut any court
drama with its agreement to pay up, the company maintained the
“merits of [its] position,” and the settlement does not include
any admission of liability. First Solar shares dropped nearly 3
percent Monday to around $55.80, giving it a market capitalization
of around $5.9 billion.

“We believe it is prudent to end this protracted and uncertain
class action litigation process, and focus on driving the business
forward,” said Mark Widmar, First Solar’s CEO, in a statement
on the settlement.

The company declined to comment on how the settlement might
impact First Solar’s business in 2020, citing pending court
approval of the settlement. Lawyers for the plaintiffs did not
immediately respond to request for comment. 

2019 was a mixed year for First Solar, the largest U.S.-based
solar manufacturer. In
Q1
and
Q2
, the company cited challenges to its bottom line including
increased operating costs, lower project revenue and high
engineering, procurement and construction costs.

But in the second quarter it achieved record module production
and shipments. In Q3, the company announced it would transition to
a partner EPC model and logged its
first quarter of profit in 2019
, while reaffirming annual
revenue guidance of $3.7 billion to $3.9 billion.

Though First Solar has pushed off this legal challenge, it noted
Monday that it’s still on the end of other pending shareholder
lawsuits. One, concerning several private investment funds managed
by Maverick Capital, also alleges “false and misleading
statements” related to the manufacturing problem and financial
filings.

Source: FS – GreenTech Media
First Solar Settles Shareholder Suit for 0 Million