Brookfield Must Face Pension Fund Suit Over TerraForm Financing

Former TerraForm Power Inc. investors can advance their challenge to a $650 million financing deal with its majority owner, Brookfield Asset Management Inc., because Brookfield’s subsequent $1.6 billion buyout of TerraForm didn’t deprive them of standing to bring the case, a Delaware judge ruled.

Greenlighting the stock dilutions claims, Vice Chancellor Sam Glasscock III rejected the argument that they were inherently derivative in nature, which would have meant they were doomed by the take-private deal.

Despite criticism, the Delaware Supreme Court ruling classifying such claims as nonderivative is still good law, the judge said.

“I am not free to ...