By Jennifer Ablan
NEW YORK (Reuters) - Billionaire David Tepper's Appaloosa Management is seeking to overhaul TerraForm Power Inc's (O:TERP) Conflicts Committee, claiming the company's controlling shareholder SunEdison Inc (N:SUNE) has breached its fiduciary duties.
In an amended lawsuit filed on Tuesday in Delaware Chancery Court, Appaloosa said SunEdison and various TerraForm directors dismantled TerraForm's corporate governance and Conflicts Committee, replacing it with a "sham committee" to enable SunEdison to take advantage of TerraForm and stockholders "at will."
Appaloosa is calling for removal of Peter Blackmore, Jack Jenkins-Stark and Christopher Compton from TerraForm's Conflicts Committee. Appaloosa had also called for the removal of Brian Wuebbels as TerraForm's chief executive officer. Late on Wednesday, TerraForm Global said Wuebbels had resigned as president and CEO and as a member of the company's board of directors, effective immediately.
Wuebbels is SunEdison's chief financial officer, but SunEdison has announced that he is being replaced as CFO in April 2016.
A spokesman for SunEdison said, "SunEdison continues to believe that Appaloosa's claims are without merit." TerraForm did not return emails and telephone calls seeking comment.
Appaloosa originally sued to prevent TerraForm, which was spun off from SunEdison, from buying some of the assets of Vivint Solar Inc (N:VSLR) after SunEdison's acquisition of the residential solar-system company.
TerraForm is a "yieldco," a company formed to hold the cash-generating assets of its parent company's clean energy assets. In December, Tepper wrote a letter to TerraForm's board outlining his frustrations at its closeness to SunEdison. He said in the letter, which was seen by Reuters, that he believes SunEdison is using TerraForm to mask its poor cash position.
Tepper, 58, has been called one of the best traders of his generation and his $18.6 billion hedge fund has routinely delivered returns so strong that the manager has periodically returned capital to investors because the fund was getting too large.
Funds affiliated with Appaloosa together owned 9.5 percent of the outstanding class A shares of TerraForm as of December.
The amended lawsuit said that when SunEdison faced resistance from prior members of the Conflict Committee to complete its own acquisition of Vivint Solar, "SunEdison exercised its domination and control over the Board to remove the Conflicts Committee members and replace them with hand-picked successors, who complied with SunEdison's wishes by approving a package of unfair transactions between TERP and SunEdison designed to allow SunEdison to complete the Vivint merger."
Earlier this month, Vivint terminated the merger agreement with SunEdison due to SunEdison's inability to close, and commenced a lawsuit for damages against SunEdison arising from its alleged breach of the merger agreement.