SunEdison faces lawsuits, cash crunch after Vivint cancels deal

In the short term, SunEdison Inc. investors may be relieved that the company's troubled deal to buy Vivint Solar Inc finally fell apart.

That feeling is unlikely to last. SunEdison climbed Tuesday after Vivint cancelled the $1.9 billion acquisition. The world's biggest developer of clean- energy projects still faces liquidity issues, and Vivint is suing for damages.

SunEdison said the deal was a key part of its growth strategy when it announced the acquisition in July, giving the company access to the rapidly growing residential solar market. Investors were skeptical, questioning both the strategy and a growing debt load. The transaction was delayed, the terms were renegotiated in December and now that it's finally fallen apart, the fallout may be significant.
 
"With this decision, Vivint Solar may be positioning for a potential SunEdison bankruptcy," Colin Rusch, an analyst at Oppenheimer & Co, said in a research note Tuesday. Vivint investors, who saw their shares lose more than two-thirds of their value since the deal was announced, may also "line up for compensation through the courts." Vivint said it terminated the deal after SunEdison missed a February 26 deadline to complete the transaction.