Solar Mosaic’s Proposed Loan Sale Prompts Pushback From States

A group of 25 states and Washington, DC, opposed bankrupt Solar Mosaic LLC’s proposed sale of consumer credit contracts as the company faces investigations into allegedly misleading and fraudulent servicing practices.

The states are challenging any sale that doesn’t follow a bankruptcy rule ensuring buyers of consumer credit contracts remain liable for related claims and defenses under the Truth in Lending Act, according to papers filed Monday in the US Bankruptcy Court for the Southern District of Texas.

A few states have ongoing civil investigations and lawsuits against the solar financier over alleged deceptive lending, false marketing, and other business ...