Bloomberg News

Ralls Loses Bid for Court Order to Block Wind-Farm Sale

March 01, 2013

Ralls Corp., the Chinese-owned company barred by the Obama administration from operating an Oregon wind farm, lost its bid for a court order to block the sale of collateral it put up to buy assets for the development.

U.S. District Judge P. Kevin Castel lifted a temporary order barring the sale and denied Ralls’ request for a preliminary injunction to prevent Terna Energy USA Holding Corp. from proceeding with the sale of wind-farm property in Texas that Ralls pledged to acquire the Oregon project. Ralls argued that Obama’s order nullified its transaction with Terna.

“We intend to go forward with selling the Texas wind farms,” Robert Weigel, an attorney for Terna, said in a phone interview yesterday.

Tim Xia, an attorney and spokesman for Ralls, didn’t immediately reply to a message requesting comment.

Ralls bought the Oregon wind farm assets from Terna, a unit of the Athens-based energy company Terna Energy SA (TENERGY), in February 2012 and was subsequently barred by President Barack Obama from developing the project on national security grounds because it’s near a U.S. Navy base. Obama’s order requires Ralls, an affiliate of China’s Sany Group Co. Ltd., to divest itself of the Oregon property.

Terna notified Ralls in December that it had failed to make a $4.2 million payment due on the Oregon project assets and that membership interest in Ralls’ Texas property would be sold.

Castel ruled Feb. 26 that Ralls hadn’t shown it would be irreparably harmed by paying the $4.2 million and thus didn’t meet the standard required for an injunction, according to the transcript of a hearing the previous day.

Obama’s Power

In a separate case, Ralls has challenged the Obama administration’s power to require a sale of the Oregon property.

U.S. District Judge Amy Berman Jackson in Washington threw out most of that suit on Feb. 22, ruling that the president has the authority to require the sale. Jackson said Ralls can continue arguing a case that it’s entitled to an explanation for the administration’s decision.

The case involving the collateral is Ralls Corp. v. Terna Energy USA Holding Corp., 13-cv-739, U.S. District Court, Southern District of New York (Manhattan). The case against the U.S. government is Ralls Corp. v. Committee on Foreign Investment in the U.S., 12-cv-01513, U.S. District Court, District of Columbia (Washington).

To contact the reporter on this story: Andrew Zajac in Washington at azajac@bloomberg.net

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net


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