An Undisclosed SEC Investigation Of TerraForm Power Was Underway Even Before SunEdison Delayed Filing Its 10-K

| About: TerraForm Power, (TERP)


TerraForm Power, a "yieldco" of SunEdison, has a recently-confirmed, but undisclosed SEC probe.

In a letter to us dated March 14, 2016, the SEC confirmed enforcement proceedings were ongoing at TerraForm Power.

That TerraForm Power was already under investigation by the SEC even before SunEdison's problems were disclosed opens questions of who-knew-what-when, and who can be trusted today.

Our Disclosure Insight® reports, like those coming from other financial news and data providers, deliver to the investing public commentary and analysis on public company interactions with investors and with the SEC. They are journalistically based in large part on our expertise with federal filings using the Freedom of Information Act.

SunEdison, Inc. - (SUNE)

TerraForm Power, Inc. - (NASDAQ:TERP)

Vivint Solar, Inc. - (NYSE:VSLR)

TerraForm Power - Confirmed, undisclosed SEC probe; added to our Watch List of Companies with Undisclosed SEC Probes

Analyst Summary: This is one of those cases of who-knew-what-when and whether those who were in the know can now be trusted.

At the end of Mar-2016, SunEdison disclosed both a DOJ and SEC investigation. This followed the company's delayed 10-K filing announced at the end of Feb-2016. Yet information recently received from the SEC shows TerraForm Power, a "yieldco" of SunEdison, was already under investigation by the SEC prior to either of these two events occurring at SunEdison. To this day, the SEC investigation of TerraForm Power, which was confirmed as on-going as of 14-Mar-2016, remains undisclosed.

Facts of Interest or Concern: There is recent news of DOJ and SEC investigations of SunEdison. Plus, an array of internal investigations, resignations, and delayed filings occurred at both SunEdison and TerraForm Power. We present a brief timeline of relevant disclosures and events as compared to what we have in our database.

TerraForm Power and TerraForm Global (NASDAQ:GLBL) are each known as yieldco's of SunEdison. However, this report speaks only to SunEdison, TerraForm Power, and Vivint Solar. We've no research history on TerraForm Global.

SunEdison and Vivint Solar: 20-Jul-2015, the two companies enter into a merger agreement.

From the Probes Reporter database -

SunEdison: On 03-Oct-2012, 24-Sep-2013, 19-Aug-2014, 19-Aug-2015, and most recently on 12-Jan-2016, we received information from the SEC to indicate a lack of recent investigative activity at this company (this includes when it was previously known as MEMC Electronic Materials). Each of these responses represented a two year look-back. As always, keep in mind that new SEC investigative activity could theoretically begin after the date covered by this latest information which would not be reflected here or in any of those similar instances cited below.

From the Probes Reporter database -

Vivint Solar: On 04-Jan-2016, we received information from the SEC to suggest the absence of recent SEC investigative activity at this company. This represented a two year look-back into SEC records on Vivint and is the only time we've researched this company.

From the Probes Reporter database -

TerraForm Power: In a letter dated 11-Feb-2016, we received information from the SEC suggesting TerraForm Power was involved in unspecified SEC investigative activity that was undisclosed at the time. This and a response below, from Mar-2016, represent the first time we have researched this company.

SunEdison: On 29-Feb-2016, SunEdison announced it would delay filing its 10-K. The company blamed internal investigations that started in late 2015 (and heretofore undisclosed), which it says were based on allegations made by former executives of the company. The company said it expected to file the Form 10-K by 15-Mar-2016

SunEdison and Vivint Solar: 07-Mar-2016, SunEdison receives notice from Vivint Solar formally terminating the merger agreement of Jul-2015.

From the Probes Reporter database -

TerraForm Power: In a letter to us dated 14-Mar-2016, the SEC confirmed TerraForm Power's company's involvement in on-going enforcement proceedings that remain undisclosed as of this date. We have no other records in our library on TerraForm Power.

SunEdison: Blaming material weaknesses in its internal controls, on 16-Mar-2016, SunEdison announced it would not be able to file its 10-K by the extended due date of 15-Mar-2016.

SunEdison: A story published by the Wall Street Journal on 28-Mar-2016, said the SEC was investigating SUNE's "… disclosures to investors about how much cash the solar-power company had on hand as its stock price collapsed last year … Officials in the SEC's enforcement unit are looking into whether SunEdison overstated its liquidity last fall when it told investors it had more than $1 billion in cash," according to the Journal's sources.

TerraForm Power: On Wednesday, 30-Mar-2016, the company issued a press release to announce Brian Wuebbels was stepping down as TerraForm Power's president, CEO, and board member. The related 8-K was not filed until the following Monday, 04-Apr-2016.

SunEdison: In an 8-K filing made on 31-Mar-2016, SunEdison said it received a subpoena from the DOJ on 28-Mar-2016. In addition SUNE said, "Also, the Company has received a nonpublic, informal inquiry from Securities and Exchange Commission (the "SEC") covering similar areas." The date the SEC started its informal inquiry of SUNE was not disclosed by the company.

TerraForm Power: In the same 8-K which repeated the press release announcing the departure of Mr. Wuebbels, filed on 04-Apr-2016, the company also announced this concerning existing credit agreements -

Fourth Amendment to Credit and Guaranty Agreement

On March 30, 2016, TerraForm Power Operating, LLC, a subsidiary of the Company, entered into a fourth amendment (the "Amendment") to its credit and guaranty agreement with Barclays Bank PLC, as Administrative Agent and Lender, the other credit parties and certain other lenders party thereto (the "Revolver").

The Amendment provides that the date on which TerraForm Power, LLC must deliver to the Administrative Agent and the other lenders party to the Revolver its financial statements and accompanying report with respect to fiscal year 2015 shall be extended to April 30, 2016.

SunEdison: 14-Apr-2016, SunEdison announces completion of investigation by Audit Committee and independent directors. The company said it found no material misstatements or fraud.

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Notes: The SEC did not disclose the details on investigations referenced herein. All we know is that they somehow pertain to the conduct, transactions, and/or disclosures of the companies referenced. The SEC reminds us that its assertion of the law enforcement exemption should not be construed as an indication by the Commission or its staff that any violations of law have occurred with respect to any person, entity, or security. New SEC investigative activity could theoretically begin or end after the date covered by this latest information which would not be reflected here.

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