On August 1, 2022, Generac Holdings Inc. (“Generac”)'s single channel partner, Power Home Solar, LLC d/b/a Pink Energy (“Pink Energy”), sued Generac, alleging, among other things, that Generac had provided “defective” components. The Pink Energy Complaint criticized Generac’s failure to recall the dangerous SnapRS unit in light of Pink Energy’s urging that they do so—both for the sake of their business and for the safety of their customers. Pink Energy also alleged that Generac did not disclose to Pink Energy that a firmware update, held out as a fix for the SnapRS issues, had known adverse effects and was shutting down entire PWRcell systems.

Then, on October 19, 2022, Generac published preliminary earnings showing dismal financial results for the third quarter of 2022, and announced a $55 million pre-tax charge relating to its clean energy product warranties and expenses, citing a distributor that had filed for bankruptcy.

Finally, on November 2, 2022, Generac released third quarter earnings and lowered guidance on sales by its solar energy business for the remainder of the year by approximately 40%. The lowered guidance was attributed to “the loss of a major customer during the quarter, along with the specific warranty-related issue”—i.e., the defective SnapRS component, which led to Pink Energy’s bankruptcy.

Whistleblowers: Persons with non-public information regarding Generac are encouraged to confidentially assist Berger Montague’s investigation or take advantage of the SEC Whistleblower program. Under this program, whistleblowers who provide original information may receive rewards totaling up to thirty percent (30%) of recoveries obtained by the SEC. For more information, contact us.

If you are a Generac shareholder and would like to learn more about our investigation and how it may affect you, please contact Berger Montague using the form above.