Array Technologies, Inc. 10-Q

Item 1. Legal Proceedings From time to time we may be involved in claims arising in the ordinary course of business. To our knowledge, other than the cases described below, no material legal proceedings, governmental actions, investigations or claims are currently pending against us or involve us that, in the opinion of our management, could reasonably be expected to have a material adverse effect on our business and financial condition. The Company believes the claims alleged in the actions discussed below are without merit and intends to continue to vigorously defend its position in these matters. The Company, in the normal course of business, is subject to claims and litigation. The Company reviews the status of each matter and assesses its potential financial exposure. If the potential loss from any claim or legal proceeding is considered probable and the amount can be reasonably estimated, the Company would accrue a liability for the estimated loss. 62 Derivative Complaints Southern District of New York On July 16, 2021, a verified derivative complaint was filed in the U.S. District Court for the Southern District of New York (the “District Court”) against certain officers and directors of the Company. The complaint alleged: (i) violations of Section 14(a) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) for misleading proxy statements; (ii) breach of fiduciary duty; (iii) unjust enrichment; (iv) abuse of control; (v) gross mismanagement; (vi) corporate waste; (vii) aiding and abetting breach of fiduciary duty; and (viii) contribution under Sections 10(b) and 21D of the Exchange Act. On July 30, 2021, a second verified derivative complaint was filed in the Southern District of New York against certain officers and directors of the Company. The complaint alleged: (i) violations of Section 14(a) of the Exchange Act for causing the issuance of a false/misleading proxy statement; (ii) breach of fiduciary duty; and (iii) aiding and abetting breaches of fiduciary duty. On August 24, 2021, the Southern District of New York derivative actions were consolidated, the court appointed co-lead counsel, and the consolidated case was stayed pending the resolution of a related putative federal securities class action that was previously filed in the District Court against the Company and certain officers and directors (the “Plymouth Action”). On March 24, 2026, the Second Circuit Court of Appeals affirmed the dismissal of the Plymouth Action with prejudice. On April 28, 2026, the District Court entered a stipulation and order submitted by the parties voluntarily dismissing the consolidated New York derivative action without prejudice in light of the Second Circuit’s affirmance of the Plymouth Action’s dismissal. Delaware Court of Chancery On August 3, 2022, a verified derivative complaint was filed in the Court of Chancery of the State of Delaware against certain officers and directors of the Company, asserting claims for: (i) breach of fiduciary duty; and (ii) unjust enrichment. The derivative plaintiff in this action sought: an award of compensatory damages in favor of the Company; restitution from the defendants and disgorgement of profits, benefits, and other compensation obtained by the defendants; an order directing the Company to reform its corporate governance and internal procedures; equitable or injunctive relief as permitted by law and equity; and the costs and disbursements of the action, including attorneys’ fees. On August 11, 2022, a second verified derivative complaint was filed with the Court of Chancery against certain officers and directors of the Company, asserting claims for: (i) breach of fiduciary duty; (ii) aiding and abetting breaches of fiduciary duty; (iii) waste of corporate assets; (iv) unjust enrichment; (v) insider selling; and (vi) aiding and abetting insider selling. The derivative plaintiff in this action sought: declaratory relief; an award of compensatory damages in favor of the Company; disgorgement of profits obtained from certain sales of Company stock by certain of the defendants; establishment of a constructive trust over certain amounts obtained by certain of the defendants; and the costs and disbursements of the action, including attorneys’ fees. On September 2, 2022, the Delaware Court of Chancery derivative actions were consolidated, the court appointed co-lead counsel, and the consolidated case was stayed pending the resolution of the Plymouth Action. On May 12, 2026, the Court of Chancery of the State of Delaware granted the derivative plaintiff’s request for voluntary dismissal of the Delaware derivative action without prejudice in light of the Second Circuit’s affirmance of the Plymouth Action’s dismissal. Sterling and Wilson Solar Solutions, Inc. (“SWSS”) vs. Array Technologies, Inc. On September 16, 2025, SWSS served an arbitration demand on the Company asserting contractual and negligence claims purportedly arising out of the Company’s provision of goods for use in a solar project in 63 Bickleton, Washington. The Company filed its Answer on October 30, 2025, and asserted defenses, including that (i) SWSS’s claims are barred by applicable contractual limitations provisions and statutes of limitations, and (ii) are otherwise unsupported. In February 2026, SWSS filed a statement of claims and damages, specifying that it is seeking contractual damages from the Company, and further adding a claim seeking indemnification by the Company for any damages incurred by SWSS relating to counterclaims brought against SWSS in another litigation concerning the same solar project. The Company is not a party to that litigation. The amount of potential damages to SWSS, if any, is unknown because the Company understands the underlying litigation to be in its early and preliminary stages. On March 5, 2026, the Company sought leave to file a dispositive motion concerning all of SWSS’ claims. On March 24, 2026, that request was denied, but the arbitration panel noted that it would consider additional requests at a later date. On April 29, 2026, the parties jointly requested that the panel stay the arbitration pending the resolution of the underlying New York litigation. On May 12, 2026, the arbitration panel entered an order staying the matter until resolution of the underlying New York case. The Company is vigorously defending the arbitration.