A local solar-power leasing firm that was reprimanded by the state’s licensing board in 2014 for operating illegally is now facing a $1.9 million breach-of-contract lawsuit charging that its high-profile owner allegedly inflated his company’s books to secure a line of credit that he has not paid off.
The 11-page federal civil lawsuit, filed Dec. 19, alleges that Jon Sader, the CEO of Sader Power Enterprises, owes nearly $2 million to Ameresco Solar, a Massachusetts company, for equipment purchased in late 2013. Ameresco’s attorneys claim in the lawsuit that Sader has made no payments for the equipment and now owes the full amount plus interest.
Sader’s outfit gained local recognition in 2011 for television ads in which he stood on a roof talking about the benefits of leasing solar panels. More recently, though, business at Sader’s company has appeared to be at a standstill.
Some customers complained that they were persuaded to send in a deposit to start leasing solar panels — often after a company representative knocked on their door to tout the panels’ potential savings — but heard little from the company thereafter.
In addition to Ameresco’s lawsuit, Sader also faces a federal class-action suit accusing him of overstating the potential savings that could be obtained from leasing his equipment. The state Attorney General’s Office continues to investigate his company for alleged violations of the Louisiana Unfair Trade Practices Act. And in March, the state’s licensing board hit him with an $8,000 fine for operating illegally, recommending at the time that he obtain the proper licensing within two months.
So far, he hasn’t done so, records from the Louisiana State Licensing Board for Contractors show.
Meanwhile, Ameresco’s lawsuit accuses Sader of misrepresenting his company’s financial health when he applied to it for the line of credit. At the time, Sader said his firm was owed about $34 million in outstanding payments, according to the lawsuit, but he did not indicate that some or all of that money was unlikely to be collected.
In a 2014 audit of his company’s books — submitted to Ameresco and included in court filings — Sader indicated that his company had only $2 million in accounts receivable, plus an additional $4.8 million marked as “due from factor,” which it expected as compensation from selling its outstanding payments that were deemed uncollectible.
Sader sent the company a letter in July ahead of the court proceedings, writing that he intended to settle his debt, but saying that his hands were tied in the near term because he was waiting to receive $32 million in financing secured by money he said he was owed by the state Department of Revenue — apparently money he was anticipating in returns from the state’s solar power tax credit incentive.
“We wish you happy holidays and are unable to comment about ongoing litigation, no matter how baseless,” Sader said in a brief email Wednesday to The New Orleans Advocate.
Louisiana’s solar power incentive program is the most generous tax break of its kind in the nation. The program, which cost state taxpayers $61 million in 2013, covers half the cost of solar panel installations. In his letter to Ameresco, Sader said he expected to be able to clear some of his debt by the end of 2014 and the rest of it by mid-2015. He completed the credit application to Ameresco in 2013, saying that the company had $51.6 million in sales that year.
In March, Sader’s firm was reprimanded by the Louisiana State Licensing Board for Contractors for his company’s work on three solar installation jobs that it was not licensed to complete. The board banned Sader from signing new contracts until his firm was licensed.
Though the board recommended that Sader get licensed within 60 days, that window lapsed more than six months ago. When asked about the status of that effort, Sader offered little clarity in his email Wednesday. “Its status is where we intend it to be,” he wrote.
At the time, the licensing board could have fined Sader up to 10 percent of the total value of a project, plus $500 in administrative costs, for contracting without the proper licensing. Sader boasts on its website that the company has performed more than 2,500 solar installations in Louisiana.
Sader entered a plea of no contest at the contractors board’s March hearing. In an emailed statement at the time, he said he had “every intention to apply for a Louisiana contractor’s license under Sader Power Enterprises’ name.”
The state handed down the fine weeks after a federal class-action lawsuitwas filed in New Orleans accusing Sader of overstating the potential savings that could be realized from leasing his equipment. That lawsuit, which is still pending, also claimed the company was not licensed to do solar installations in Louisiana.
The suit, filed by two New Orleans residents, also raised a litany of other issues: that Sader’s company allegedly did not disclose to customers the solar-power equipment’s actual cost, that it did not provide customers with copies of signed contracts and that it urged customers to have the equipment installed even if their property was not well suited for it because of shade or other reasons.
That suit was assigned to U.S. District Judge Mary Ann Vial Lemmon. Ameresco’s suit has been assigned to U.S. District Judge Stanwood Duval Jr.
Follow Richard Thompson on Twitter, @rthompsonMSY.