The collapse of companies is rarely an uncontested affair, however Level Solar may be setting a new bar for drama. The company disappeared without a trace after firing its employees without notice last September and then filed for Chapter 11 bankruptcy in December. Now the former CEO has filed a motion to covert the case to a Chapter 7 liquidation, accusing current management of using the Chapter 11 case to attack him legally.
In the motion filed in bankruptcy court last week, former CEO Richard Keiser alleges that its new leadership and current legal team Level Solar “has made no progress towards emerging, has no plan to emerge, and has no intention to emerge as a reorganized going concern” from the Chapter 11 process, which allows a bankrupt entity to reorganize its debts.
Keiser alleges that the company has taken none of the typical steps, such as filing first day motions or organizing debtor-in-possession financing, as well as failing to file any monthly reports to date – despite continuing to amass legal expenses.
pv magazine’s inquiry into bankruptcy court documents have not found any first day motions; however the case has also been a bilateral series of accusations between current president and CEO William Frey and Director Richard Pell on one side and Keiser on the other.
Both accuse the other party of making decisions that caused the company’s workman’s compensation to lapse, which resulted in the layoffs in September – three months after Keiser left the company.
In the latest filing, Keiser alleges that Frey and Pell are using the Chapter 11 process not to rebuild Level Solar, but as a means to go after him personally, including in criminal lawsuits. In the motion, Keiser’s attorneys cite statements by Pell and Frey that they would go after “every asset that he has” and “drive him into bankruptcy”.
Keiser is not the only party to push back against requests by Level Solar. Sunrun has also filed motions objecting to a motion by the company’s legal team which it says attempts to inspect its “private business affairs”, despite Sunrun being a non-debtor third party, with no relationship to Level Solar.
CPA firm Novogradac, one of the debtors, has also filed an objection to the a similar motion, arguing that Level Solar has failed to demonstrate good cause for the discovery, which it describes as “overbroad”.
It remains to be seem whether the court will convert the case to Chapter 7, or what the final result of this legal battle will be. But as the current and former leadership of Level Solar battle it out, employees have their own concerns. A number of former Level employees have filed suit against the company alleging that the company failed to provide the required 90 days of warning under the Worker Adjustment and Retraining Notification (WARN) Act.
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