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Generac (GNRC) Defective Components Case.
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On November 2, 2022, Generac (GNRC) lowered sales guidance on its solar energy business by approximately 40%.
On a conference call with investors and analysts, Generac’s CEO, Jagdfeld, attributed the lowered guidance to “the loss of a major customer during the quarter, along with the specific warranty-related issue”—i.e., the defective SnapRS component and the Pink Energy bankruptcy that resulted directly from that defect.
Analysts expressed shock upon learning how Generac’s clean energy business was on Pink Energy, with several analysts noting that investors had not been told of the significant concentration of that business with a single partner.
- Going back on October 19, 2022, in the wake of Pink Energy’s bankruptcy, Generac revealed that it had taken “pre-tax charges totaling approximately $55 million, including approximately $37 million of clean energy product warranty-related matter and approximately $18 million of bad debt expense related to a clean energy product customer that has filed for bankruptcy.”
- On August 1, 2022, Pink Energy filed a lawsuit against Generac, revealing that the Company’s “defective” SnapRS components caused millions of dollars of damage, giving rise to liability that threatened Pink Energy’s solvency.
Taking all representations and facts into account, Investors have reasons to suspect that Generac and its senior executives concealed from investors a defective component at the core of Generac’s solar power products.
Failure to Disclose,
Breach of Fiduciary duty,
Shock Event Date
02 November 2022
01 December 2022
Hon. Brett H. Ludwig