A lawsuit accuses developer Tom Buttgenbach of misappropriating the University of California system’s money after the latter invested in a collection of solar projects.
The complaint, filed by public university regents in January in Alameda County Superior Court, claims that Buttgenbach submitted false claims to the university system to induce solar project investments worth $150 million, which he allegedly used to enrich himself.
Buttgenbach is the co-founder and chief executive of 8minute Solar Energy, LLC. The complaint names both him and the company as defendants.
The lawsuit details alleged conversations between Buttgenbach and the university system after the executive had a falling out with a business partner in late 2018. That falling out required Buttgenbach to come up with “$100 million to buy out his partner,” the lawsuit alleged.
According to the complaint, Buttgenbach told university regents he had a pipeline of solar development projects and had signed contracts with companies that wanted to buy the power generated and operate the projects after completion. At the time, the university system was considering renewable energy investments and was looking for opportunities to help fund pension payments and provide other financial support to the University of California system.
The suit says Buttgenbach presented a business plan containing a fixed budget, restrictions on the use of cash, financial projections and project sales timelines. Buttgenbach allegedly touted 8minute’s high success rates on projects that had solar power purchase agreements in place with customers. The University approved a $150 million investment.
The lawsuit alleged that Buttgenbach “never intended to execute on the ‘fully funded’” business plan. Instead, he allegedly “sought to enrich himself at the expense of his investors, and ultimately at the expense of over 250,000 California public pensioners.”
According to the complaint, Buttgenbach “engineered a financial crisis” after receiving the $150 million investment, delaying project sales, accelerating the development process to increase liquidity needs and misappropriating investors’ cash for personal projects.
The lawsuit claims that in August 2021 Buttgenbach demanded more than $4.1 billion, of which the university system’s share would be $1.53 billion, and refused to validate this amount to investors.
“This amount was entirely unsupported by the prior representations, financial projections, models, and budget that Buttgenbach submitted to induce the University to approve its $150 million investment,” court documents say.
University regents are seeking nearly $1.22 billion in damages.
Representatives for Buttgenbach and 8minute Solar Energy called the regents’ allegations “baseless and frivolous.” In a motion filed January 13, lawyers for Buttgenbach and 8minute said the allegations are already the subject of an arbitration hearing initiated by co-investors in the solar projects.
8minute Solar told Renewable Energy World the company hired a private arbiter to conduct a review of the fraud accusations. A company spokesperson sent us a statement that reads in part:
“After a comprehensive review comprised of over three thousand man hours, Brown Rudnick and its consultants collectively concluded that the UC Regents’ claims against 8minute and Dr. Buttgenbach are meritless. In fact, Brown Rudnick concluded that there is evidence of impropriety by UC Regents’ investment agent in the transaction, which was ultimately found by the Arbitrator as well.”
“8minute will vigorously defend itself should the UC Regents continue to pursue these baseless and frivolous claims,” the spokesperson added.
Buttgenbach founded 8minute with a business partner in 2009. In the following years, 8minute expanded to have one of the largest project pipelines in the country, including more than 50 utility-scale projects in California, Texas and the Southwest. The company’s collection includes more than 18 GW of solar and 24 GWh of storage under development, according to its website.
In 2020, 8minute announced power purchase agreements with Monterey Bay Community Power Authority (MBCP) and Silicon Valley Clean Energy (SVCE) for a 250 MWdc / 200 MWac Aratina Solar Center that includes 150 MWh of energy storage.