Sherwin-Williams expects $77 million charge in second quarter
CLEVELAND, Ohio – Sherwin-Williams Company said that it expects a charge of about $77 million in the second quarter, reflecting a loss in expected tax benefits related to its investment in mobile solar generators with DC Solar Solutions.
The company said in a June 28 filing with the U.S. Securities and Exchange Commission that it invested in the renewable energy tax credit funds exclusively with DC Solar during 2011 and from 2013-2017. The expected tax benefits it was hoping to achieve through this investment never materialized, as DC Solar had its assets seized by federal authorities related to an ongoing federal investigation in 2018.
DC Solar filed for Chapter 11 bankruptcy in February 2019, and around this time, Sherwin-Williams also learned of an affidavit from the Federal Bureau of Investigation alleging that DC Solar was operating a fraudulent “Ponzi-like scheme” involving mobile generators sold to investors.
In its SEC filing, Sherwin-Williams said the bankruptcy was converted to a Chapter 7 liquidation in March 2019.The company said that it was not immediately clear during its first quarter that there was a material loss related to these developments. However, as its investigation into the matter continued in the second quarter, it determined that the tax benefits expected related to the investments would no longer be realized.