New SolarCity Lawsuit Tosses Another Wrench In Potential Merger With Tesla

(REUTERS/Rashid Umar Abbasi )

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Chris White Tech Reporter
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Solar panel maker Cogenra Solar is suing SolarCity, adding another layer of complication to SolarCity’s attempt to merge with Tesla Motors.

Cogenra Solar, a subsidiary of SunPower, filed a lawsuit on Monday accusing SolarCity of stealing Cogenra’s Shingling technology designed to make solar panels more commercially viable.

The lawsuit claims SolarCity subsidiary Silevo misappropriated Cogenra’s trade secrets, and other intellectual property to gain a head start on producing shingled-cell solar equipment.

SolarCity, meanwhile, told reporters a former employee unlawfully downloaded software, copied the information, resigned, and joined SunPower as a sales manager.

“Any unauthorized copying and use of this information is a very serious violation of SolarCity’s intellectual property rights so we immediately notified SunPower,” SolarCity said in a statement.

SolarCity also said Cogenra has not pinpointed any actual trade secrets it owns, or those that SolarCity supposedly misappropriated.

News of the lawsuit comes at a terrible time for SolarCity, as the company continues to complete a merger with Tesla, both of which are chaired by billionaire tech-entrepreneur Elon Musk.

Tesla’s merger with SolarCity is getting hung up by shareholder lawsuits that claim the fusion is essentially a bailout for Musk’s cash-strapped solar panel project.

Musk owns 19 percent of Tesla and 22 percent of the beleaguered SolarCity.

The lawsuits allege that insiders with the electric vehicle maker would be unjustly enriched by the companies’ combination, according to a regulatory filing on Monday. Two individual shareholders and two public pensions filed the lawsuits earlier this month.

The Arkansas Teacher Retirement System, as well as investors Ellen Prasinos and P. Evan Stephens, joined the Riviera Beach Police Pension Fund in Florida in its lawsuit.

Tesla, for its part, said it would vehemently oppose any future litigation meant to scuttle the merger.

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