Commitments to Acquire Renewable Energy Facilities
As of December 31, 2017, the Company did not have any open commitments to acquire renewable energy facilities.
The Company leases land and buildings under operating leases. Total rental expense was $21.0 million, $23.5 million and $12.2 million during the years ended December 31, 2017, 2016 and 2015, respectively. The following table summarizes the Company's future commitments under operating leases as of December 31, 2017:
The Company is not a party to any material legal proceedings other than various administrative and regulatory proceedings arising in the ordinary course of the Company's business or as described below. While the Company cannot predict with certainty the ultimate resolution of such proceedings or other claims asserted against the Company, certain of the claims, if adversely concluded, could result in substantial damages or other relief.
Securities Class Action
On April 4, 2016, a securities class action under federal securities laws (Chamblee v. TerraForm Power, Inc., et al., Case No. 1:16-cv-00981-JFM) (the "Chamblee Class Action") was filed in the United States District Court for the District of Maryland against the Company and two of its former officers (one of which was also a director of the Company) asserting claims under Section 10(b) and 20(a) of the Securities and Exchange Act of 1934 and SEC Rule 10b-5 on behalf of a putative class. The complaint alleges that the defendants made materially false and misleading statements regarding the Company’s business, operational and compliance policies, including with respect to disclosures regarding SunEdison’s internal controls and the Company's reliance on SunEdison. An amended complaint was filed on September 26, 2016 and a former officer and director of the Company were added as defendants. On October 4, 2016, the Judicial Panel on Multidistrict Litigation transferred this matter to the U.S. District Court for the Southern District of New York (SDNY) for consolidated or coordinated pretrial proceedings. On December 19, 2016, an initial case management conference was held in the multidistrict litigation proceedings in the SDNY. The Court entered an order requiring all parties to the multidistrict litigation to mediate and entered a partial stay of all proceedings through March 31, 2017. On March 24, 2017, the plaintiffs filed an amended complaint adding three additional directors and officers of the Company as defendants, as well as additional factual allegations. On June 9, 2017, the Company filed a motion to dismiss the case. After mediation, the parties agreed in principle to a settlement of $14.8 million on behalf of a putative settlement class containing all persons and entities that purchased or otherwise acquired the publicly traded securities of the Company between July 18, 2014 and March 15, 2016, expressly conditioned on, among other things, funding of the settlement by the Company’s directors’ and officers’ liability insurance providers in the amount of $13.63 million. The Company reserved $1.13 million for its estimated probable loss related to this complaint as of December 31, 2016, which was the amount the Company would have been prepared to fund the settlement out of its own funds. On September 14, 2017, the U.S. District Court for the SDNY preliminarily approved the settlement and provided the Company with an express termination right in the event that the settlement was not timely funded with proceeds from the directors’ and officers’ liability insurance. In January of 2018, the insurers funded $13.63 million and the Company funded $1.13 million into the settlement escrow account. The settlement was finally approved at a hearing of the court on January 31, 2018. As of December 31, 2017, the Company recorded an insurance receivable of $13.63 million within prepaid expenses and other current assets and a corresponding additional liability of $13.63 million within accounts payable, accrued expenses and other current liabilities in the consolidated balance sheet.
Pursuant to the Merger Agreement with Orion Holdings, the Company has agreed to issue additional shares of Class A common stock to Orion Holdings for no additional consideration in respect of the Company’s net losses, such as out-of-pocket losses, damages, costs, fees and expenses, within a prescribed period following the final resolution of the Chamblee Class Action. These net losses would include the $1.13 million contributed by the Company to the settlement but would not include the $13.63 million contributed by the Company's insurers and certain attorneys’ fees that TerraForm Global, Inc. has agreed to