University of California system sues 8minute Solar, co-founder

8minute’s Lotus Solar Farm, California (Source: 8minute Solar Energy).

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 was filed by Alameda County Superior Court’s public university regents in January. It alleges that Buttgenbach falsely claimed to the university system to incite solar project investments of $150 million. This he allegedly used for his own enrichment.

Buttgenbach is co-founder and chief executive at 8minute Solar Energy, LLC. The complaint names him as the defendant along with the company.

The lawsuit details conversations between Buttgenbach, the university system, and Buttgenbach after an alleged fallout with a business partner in 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 claimed that he had a portfolio of solar development projects and had signed agreements with companies to purchase the power generated and then operate the projects. The university system was investigating renewable energy investments at the time and was looking for ways to support the University of California system with financial and pension payments.

According to the suit, Buttgenbach presented a business proposal that included a fixed budget, cash restrictions, 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 $150million 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.

Nearly $1.22 billion in damages is sought by university regents.

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.

8 minute Solar told Renewable Energy WorldThe company hired a private arbitrator to review the fraud allegations. A company spokesperson sent a statement to us that said 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 and a business partner founded 8minute in 2009 8minute grew to be one of the most important project pipelines in the nation, with more than 50 utility-scale projects across Texas, California, and the Southwest over the years. The company’s collection includes more than 18 GW of solar and 24 GWh of storage under development, according to its website.

8minute announced power purchasing agreements with Monterey Bay Community Power Authority, (MBCP), and Silicon Valley Clean Energy(SVCE) in 2020 for a 250 MWdc /200 MWac Aratina Solar Center which includes 150 MWh.