Evergreen Solar files suit against Lehman Bros.

Evergreen Solar Inc., a Marlborough manufacturer of solar power panels, said today it has filed suit against Barclays and Lehman Brothers in the Lehman Brothers bankruptcy cases.

Evergreen Solar said it is demanding the immediate return of Evergreen stock shares loaned to Lehman Brothers in July as Evergreen Solar seeks to challenge Barclay's ownership claim to shares transferred during Lehman Brothers bankruptcy proceedings.

The suit was filed in the United States Bankruptcy Court for the Southern District Court of New York against Barclays PLC, Lehman Brothers Holdings Inc. and certain of their affiliated entities. Lehman Brothers was one of the casualties of a crisis of confidence affecting Wall Street firms in the wake of the credit crunch; it was forced into bankruptcy.

Evergreen Solar said in a press release: "Evergreen Solar is seeking to ultimately recover all of the 30.9 million loaned shares and has specifically demanded Barclays immediately return the approximately 12.2 million shares that Evergreen Solar learned it obtained from Lehman Brothers after certain Lehman Brothers entities filed for bankruptcy."

The press release included a statement from Michael El-Hillow, Evergreen Solar's chief financial officer.

"We are outraged that a substantial number of our shares were transferred from Lehman Brothers in bankruptcy in complete disregard for Lehman Brothers' obligations to return the shares under its share lending agreement with Evergreen Solar," El-Hillow said. "This violation of our contract with Lehman was significantly compounded by the fact that Barclays was able to acquire this valuable asset, our shares, which Lehman no longer had the power to transfer to any party other than Evergreen Solar."

The 30.9 million shares in question were loaned to Lehman Brothers in connection with a $375 million financing Evergreen Solar completed in July 2008, Evergreen Solar added.

Following the Lehman bankruptcy, the loaned shares were not immediately returned to Evergreen Solar as required by the contract entered into with Lehman Brothers' European affiliate, Evergreen Solar said.

The company said the lawsuit does not affect day-to-day business operations.

The company also noted the financing is complete and the money is in Evergreen's possession.

In response to a Globe inquiry, a company spokesman e-mailed a Sept. 15 statement from El-Hillow regarding Evergreen's cash position.

"The majority of our cash and short term investments are held by Silicon Valley Bank, our corporate commercial bank," El-Hillow said in that statement. "We also have funds on deposit with two international commercial banks. We have sufficient cash to complete our 160 MW Devens facility and support our other operating needs as we drive to profitability in 2009."
(By Chris Reidy, Globe staff)