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Wind Farm Sued by Minnesota for Fraud Files for Chapter 7 Bankruptcy

Published on 06/30/2013 -


A wind farm that recently fought a lawsuit filed by the state of Minnesota alleging fraud is filing for Chapter 7 bankruptcy, according to a report from the Minneapolis Star Tribune.

Sources say Renewable Energy SD, a seller of wind energy equipment, was recently sued by the Minnesota attorney general’s office for misusing federal stimulus money.

The lawsuit, combined with lagging business, prompted the company’s key officials to seek debt relief in U.S. Bankruptcy Court, according to sources.

Wind Energy Company Files for Chapter 7 Bankruptcy

In its bankruptcy filing, Renewable Energy claims to have nearly $16 million in debt, compared with a relatively paltry $6.2 million in assets, sources say.

The company’s financial health took a significant blow a few months ago when the attorney general’s office obtained an injunction that prohibited Renewable Energy from selling its wind generations, according to Ben Wogsland, a spokesman for the attorney general.

The temporary judgment was leveled against Renewable Energy after the state of Minnesota filed a lawsuit against the company and its owner, 46-year-old Shawn Dooling, in January.

The fraud lawsuit alleges that Dooling sold faulty wind turbines to farmers across the country after misusing federal stimulus money, according to sources.

After receiving the federal money, Renewable Energy allegedly failed to deliver several of the turbines, or simply built turbines that failed to operate properly, according to the state’s lawsuit.

And the company is reportedly facing more than a dozen lawsuits related to the alleged fraud. Most of these lawsuits have been filed by disgruntled suppliers and customers, sources say.

Lawsuits Push Wind Energy Firm into Bankruptcy Protection

While the state’s lawsuit is pending, the company will not be able to sell any of its products, which prompted the decision to call a bankruptcy attorney.

“The bankruptcy filing was unavoidable because the company was out of business and had no way to fund its defense in multiple court cases,” said the company’s attorney.

And while bankruptcy is often a valuable resources for companies and individuals looking to shed their debts, the alleged presence of massive fraud in this case could make Renewable Energy’s task much more difficult.

According to the state’s lawsuit, the company repeatedly broke promises related to the efficiency and value of their wind turbines. One angry customer, a farmer named Gerald Crowell, told sources, “I’ve never run into a scam this big, and I hope never to run into another one like it.”

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