Gaelectric's venture in US with Airdynamics ends in court feud
A subsidiary of Irish wind energy firm Gaelectric and a joint venture partner in the US, Airdynamics, have had an acrimonious falling out -- with the two sides preparing court cases against each, the Irish Independent has learned.
Gaelectric Northwest was formed in 2008 after the Irish company and Airdynamics, based in Washington state, agreed to a partnership that was expected to create €30m in value over a four-year period as the unit advanced plans to develop roughly 4,000 megawatts of wind power.
Airdynamics is owned by two local men, John Laney and Dave Richards. Their company had a number of sites in three US states -- Washington, Idaho and Oregon.
And as part of the agreement between the two companies, Mr Laney was appointed managing director of Gaelectric Northwest.
However, it is understood the relationship between Gaelectric and Mr Laney and Mr Richards deteriorated rapidly from the middle of last year.
One source familiar with the joint venture says Airdynamics is claiming it is owed tens of thousands of dollars in unpaid fees for various services it provided to Gaelectric Northwest.
It is also believed that Mr Laney and Mr Richards are unhappy with what they perceived to be a lack of commitment from the Irish parent.
It is also understood that they might also seek the payment of a substantial sum of money unrelated to the fees that they claim is owed to them.
Gaelectric has two other subsidiaries in the US but these are separate entities to Gaelectric Northwest -- Gaelectric North America and Gaelectric LLC. The majority of the Irish company's US activities are based in Montana and fall under its Gaelectric LLC division, while in Ireland it is hoping to develop projects across the island.
Gaelectric chief executive Brendan McGrath confirmed to the Irish Independent yesterday that the US partnership had ended. "We did not find them to be an effective partner," he claimed of Airdynamics.
"The expectations from the planned projects weren't realised. That's not unusual in the sector though."
He maintained that the areas within which the joint venture hoped to develop projects ultimately were not viable and that while mediation between Gaelectric Northwest and Airdynamics was planned, the joint venture was now defunct.
Gaelectric Northwest recently filed a case against Airdynamics and others in Washington claiming "negligent and intentional misrepresentation". It is believed a counter-claim will soon be filed.
Gaelectric has raised about €35m in financing since it was set up in 2004, with €25m of that secured in 2008.
Mr McGrath said the company would probably begin fresh funding enquiries within six months, with future funds likely to be earmarked for projects in the United States.