Q: We bought a home 2 years ago that had 9 years left on a solar lease with American Solar Direct. Can we get out?
Our panels generate enough power to run our refrigerator and our electric bills are through the roof. ASD went bankrupt years ago. Can I get out of this lease and have a new company take over?
A: If they went bankrupt, it’s doubtful they can come after you to collect. I’d have a bankruptcy lawyer look over your documents before you do anything.
A:
A quick search tells me that ASD went out of business and filed a Ch. 7 (liquidation) bankruptcy.
A debtor in bankruptcy, and/or his creditors and contractors, has a limited (two months) to choose whether to assume any executory contract or to reject it. You are far beyond that deadline, but ASD equipment has a 30-year useful life, and there were, no doubt, warranties. I don't know whether any other company has purchased the assets of ASC, nor whether there is any money behind any warranty you may have.
Given the foregoing, yes, you can and probably should look to some other existing solar company to service your ASD equipment. To be secure, however, you should engage a CA lawyer to look into what, if anything, needs to be done for you to terminate your ASD involvement (who are you still paying, btw?).
A: This simply can't be answered without a review of all the paperwork concerning the transaction. The fact that the vendor went out of business does not, standing alone, mean anything. Someone still owns the lease, either a successor company or some entity that purchased it from the bankruptcy estate, or even the bankruptcy trustee. But it's owned by someone.
A: In California, if the solar company that leased you the panels has gone bankrupt, it's important to review the lease agreement to understand your rights and obligations. There may be a successor company responsible for the lease, or there might be provisions for termination upon bankruptcy. Consult with an attorney to interpret the specific terms of the lease and to determine if you have grounds to terminate it. Furthermore, a new company might be interested in taking over the lease, but this typically requires agreement from all parties involved, including any bankruptcy trustees or new owners of the bankrupt company's assets. Be aware that there might be financial implications or early termination fees, so it's crucial to proceed with full understanding of the contract and the law.
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