NEW YORK – A U.S. judge on Tuesday dismissed a lawsuit by Abengoa SA shareholders accusing the Spanish engineering and energy company of carrying out massive accounting fraud between 2013 and 2015, with which they claimed that would have masked a liquidity crisis that culminated in bankruptcy.
Edgardo Ramos, a judge for the district of Manhattan, rejected allegations, including those of a whistleblower, that Abengoa repeatedly inflated its profit margins and prematurely booked contract income in order to increase bonuses for its directors.
In a 56-page decision, Ramos said Abengoa did not mislead shareholders by publicly disclosing its “strict financial discipline,” and said paying performance-based bonuses does not in itself constitute a motive for fraud.
He also said that shareholders waited too long to sue Bank of America, Canaccord Genuity, HSBC and Société Générale, which helped Abengoa sell 517.5 million euros ($518 million) of ADSs (American Depositary Shares, a type of shares of foreign companies listed in the United States) in October 2013.
The lawsuit covered investors who bought Abengoa’s ADSs between October 17, 2013 and August 2, 2015, the day before the Spanish company surprised the market by requesting a capital increase. Its market value fell by about $8.1 billion in the following two days.
Nicholas Porritt, a lawyer for the investors, said they are “obviously disappointed” and will study the court decision to determine their next steps.
Abengoa and its lawyers did not immediately respond.
The company filed for bankruptcy protection in November 2015, and four months later it filed for Chapter 15 of the United States Bankruptcy Code.
Both procedures ended in 2019.
Excluding its parent, Abengoa renewed voluntary bankruptcy proceedings in February 2021, after creditors refused to continue negotiations on a restructuring agreement.
The Seville-based company went into debt for more than a decade to finance an aggressive expansion into renewable energy.
In June 2022, Abengoa began insolvency proceedings for its main business, after the Spanish State refused to grant an aid package that would have allowed it more time to evaluate a takeover bid from the venture capital firm TerraMar Capital. LLC.