Town of Genesee-based Generac Holdings Inc. is facing a new lawsuit related to the alleged sale of a defective component found within the company’s solar energy systems.
New York-based investor rights law firm Bernstein Litowitz Berger & Grossmann LLP (BLB&G) filed a class action lawsuit Thursday in the U.S. District Court for the Eastern District of Wisconsin that alleges violations of federal securities laws by Generac.
The complaint filed by BLB&G on behalf of investors alleges that Generac made “numerous materially false and misleading statements and omissions” related to the safety and success of the company’s clean power products. This includes a component called a SnapRS, which has already been the subject of several other lawsuits.
Earlier this year, Mooresville, North Carolina-based Pink Energy filed a lawsuit against Generac alleging the SnapRS components malfunctioned, burned or melted. However, Pink Energy later filed for bankruptcy, which stayed the company’s lawsuit against Generac.
Thursday’s lawsuit claims that because of Generac’s “misrepresentations and omissions,” the company’s common stock traded at artificially inflated prices. BLB&G alleges it is advising investors that have incurred losses in excess of $10 million on their investments in Generac common stock.
“Indeed, Generac faced significant undisclosed warranty liability as a result of the issues created by the SnapRS defect and resulting fallout with its largest channel partner, Pink Energy,” reads the complaint.
On Nov. 2, Generac released third quarter earnings and lowered guidance on sales by its solar energy business for the remainder of the year by approximately 40%. In response to third quarter earnings, Generac stock fell 8%. This is in addition to two other disclosures that also led Generac stock to fall, the complaint says.
Thursday’s lawsuit against Generac seeks compensation for affected investors for all damages sustained, as well as relief for all costs related to the filing of the lawsuit.
Generac declined to comment on the specifics of Thursday’s lawsuit, but company leadership did state “we intend on vigorously defending ourselves in the matter.”