North Coast Solar Stocks

September 15, 2009

Evergreen Solar disputes claims from Lehman unit

Filed under: ESLR — Tags: , , , — Jason @ 8:01 pm

Tue Sep 15, 2009 8:01pm EDT

* Evergreen Solar files SEC response to Lehman unit letter

* Evergreen Solar says unit lacks right to terminate

* Disputes claim that it defaulted on payment obligations

LOS ANGELES, Sept 15 (Reuters) – U.S. solar panel maker Evergreen Solar Inc (ESLR) said on Tuesday that Lehman Brothers does not have the right to terminate a “capped call” transaction that occurred in connection with its 2008 note offering.

Evergreen Solar said in an SEC filing that Lehman Brothers Derivatives Inc sent the company a letter in September “purporting to terminate a capped call transaction” between LB OTCD and that the solar power company had defaulted on payments.

The company received a letter from LB OTCD, which claimed that Evergreen failed to pay more than $2.7 million on two dates plus about $200,000 in interest, in July.

Evergreen rejected that claim in the filing, citing its belief that it can suspend obligations due to what it considers defaults by LB OTCD related to bankruptcy filings by the Lehman unit and its parent company Lehman Brothers.

Evergreen entered into the $68.1 million capped call transaction with LB OTCD in connection with the solar power company’s $373.75 million note offering in 2008.

The transaction was designed to reduce the potential dilution from the conversion of the 4 percent senior convertible notes due in 2013 into shares of the company’s stock.

Evergreen said in the filing that it “intends to vigorously defend against any such claims by LB OTCD and/or its affiliates” and will continue to pursue its claims in bankruptcy against Lehman Brothers (LEHMQ.PK) entities.

Evergreen has been in litigation with Lehman Brothers since the investment bank filed for bankruptcy a year ago. Evergreen, a start-up, has claimed in court papers that British bank Barclays Plc inappropriately acquired shares of the company as part of its purchase of Lehman’s brokerage business, and that the lack of clarity about the status of its shares could hurt its ability to raise capital.

As of June 30, 2009, Barclays Global Investors is the company’s second-largest shareholder.

Evergreen, which is based in Marlboro, Massachusetts, makes silicon wafers used in solar panels.

Evergreen Solar’s shares were at closed up 2 percent at $1.98 in Tuesday trading on the Nasdaq.

(Reporting by Laura Isensee; Editing by Matthew Lewis, Bernard Orr)

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