Pink Energy files for bankruptcy, pausing company’s lawsuit against Generac

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The North Carolina solar energy company that filed a lawsuit against Town of Genesee-based Generac Power Systems this summer has filed for Chapter 7 bankruptcy.

Mooresville, North Carolina-based Power Home Solar, LLC, which had been doing business as Pink Energy, made the filing on Oct. 7. The company has permanently closed its doors and will face immediate liquidation. Pink Energy has estimated assets in the $100 million to $500 million range, but also has estimated liabilities in the same price range.

Generac is listed as a disputed creditor in the bankruptcy filing. The company says Pink Energy owes Generac $17,706,908 in outstanding debt, which Pink Energy disputes.

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This disagreement stems from a lawsuit Pink Energy filed against Generac in August. That lawsuit alleges Generac had been providing Pink Energy with failing parts that had malfunctioned and burned or melted. The part in question is a component found in one of Generac’s solar energy systems, called a SnapRS.

“We are aware of Pink Energy’s recent Chapter 7 bankruptcy filing,” said Generac in a statement Tuesday. “Over the past few weeks, we have already contracted with high-quality third-party providers to perform warranty services on Generac’s products, now that Pink Energy will no longer be providing this service to its customers.”

Pink Energy said Generac owes the company $39 million to reimburse the costs associated with replacing SnapRS parts during service calls. Due to the bankruptcy filing, Pink Energy’s lawsuit against Generac is now stayed.

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“Due to rampant consumer discontent resulting from faulty Generac solar equipment, Pink Energy has been forced to close its doors permanently,” reads the company’s website. “We have exhausted all avenues to find a way forward that would allow us to service all past, present and future customers and are devastated that we can’t do so.”

Generac told BizTimes Media last month it had already introduced a new, next-generation rapid shutdown device to replace the SnapRS parts. The company also said Pink Energy did not follow installation guidelines for the parts.

“It is unfortunate that Pink Energy, as the installer and service provider of such products, has made the unilateral decision to quit offering Generac warranty support despite the availability of parts,” according to a statement from the company.

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While Pink Energy’s lawsuit against Generac was the first, it likely will not be the only one related to the SnapRS parts. New York-based DarrowEverett LLP, a full-service business law firm, announced in September it is investigating product issues related to Generac’s SnapRS parts. The firm said it is “actively representing” solar energy companies that have suffered damages due to the SnapRS part.

“Our team is paying close attention to the impact these Generac product issues are having on customers and regional and national solar energy installation companies,” said Douglas Otto, partner and DarrowEverett business litigation practice leader.

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