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A former SunEdison Inc. executive has secured a stunning $34.5 million settlement, marking the largest documented recovery for a Sarbanes-Oxley (SOX) whistleblower retaliation claim since the law’s inception in the wake of the Enron scandal. The deal follows nearly a decade of fierce legal battles over allegations that he was fired in retaliation for exposing potential securities law violations.

Carlos Domenech Zornoza, the former president and CEO of Terraform Global Inc. and Terraform Power Inc. (TERP), reached the settlement with SunEdison-sponsored yieldcos after alleging that he was terminated for raising concerns about fraudulent financial reporting as the company spiraled into its 2016 bankruptcy.

Exposing Alleged Corporate Misconduct

Domenech contended that SunEdison’s then-CEO Ahmad Chatila and CFO Brian Wuebbels had engaged in deceptive financial practices, misrepresenting actual and projected cash holdings while orchestrating self-serving transactions between SunEdison and its yieldcos. His concerns reached the desks of board members, including Peter Blackmore and Emmanuel Hernandez, but instead of intervention, Domenech claimed he faced a swift and retaliatory purge from all leadership positions.

SunEdison filed for Chapter 11 bankruptcy just five months after Domenech’s ousting, further validating his warnings of looming financial catastrophe.

Legal Battle Spanning Multiple Courts

Domenech initiated his whistleblower retaliation claim with the U.S. Department of Labor in 2016 before escalating the case to federal court in Maryland in 2018. It was later transferred to New York as part of SunEdison’s sprawling multidistrict litigation (MDL).

The case saw several dramatic turns:

• In 2019, a federal judge dismissed claims against Blackmore and Hernandez, ruling that SOX did not impose liability on individual company directors.
• In April 2023, after extensive pretrial motions, the case was greenlit to proceed against Terraform Global and TERP.
• By January 2024, U.S. District Judge Paula Xinis ruled in favor of Domenech’s liability claim, setting the stage for a damages trial.

Settlement Reached On Eve of Trial

Just before the damages trial was set to begin on January 21, 2024, the parties announced a settlement, bringing an end to the grueling legal fight. On March 20, 2024, TERP publicly confirmed the $34.5 million payout.

A Resounding Message for Corporate Whistleblowers

The legal team behind Domenech hailed the settlement as a landmark moment in whistleblower protection law.