Company: ALCE
Filing Date: 2025-06-06
Form Type: 10-K
Source: 0001213900-25-052242
Chunk: 1614

Company: Alternus Clean Energy, Inc.
Filing Date: 2025-06-06
Form: 10-K
Item: Item 4
Chunk 1614
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. back to AEG. The United States office lease was part of the deconsolidation, with $126 thousand incurred
as lease expense before that date. Refer to Footnote 20 for more details.

The Company had no finance
leases as of December 31, 2024 and 2023.

    16.
    Commitments and Contingencies

Litigation

The Company recognizes a liability
for loss contingencies when it believes it is probable a liability has occurred, and the amount can be reasonably estimated. If some amount
within a range of loss appears at the time to be a better estimate than any other amount within the range, the Company accrues that amount.
When no amount within the range is a better estimate than any other amount, the Company accrues the minimum amount in the range. The Company
has established an accrual for those legal proceedings and regulatory matters for which a loss is both probable and the amount can be
reasonably estimated.

On October 15, 2024 Sunrise
Development LLC (“Sunrise”) requested a hearing be scheduled in binding arbitration against the Company, two of its former indirect
wholly owned subsidiaries, ALT US 03 and ALT US 04, and a related party, Alternus Energy Group PLC (“AEG”), to be conducted
in Minneapolis, MN in accordance with the Commercial Arbitration Rules of the American Arbitration Association (the “AAA”),
claiming that approximately $5 million is due and owed to Sunrise pursuant to a settlement agreement by and among the parties, plus costs,
expenses, legal fees and interest. On or about February 6, 2025, the Company entered into a second set of settlement terms with Sunrise,
pursuant to which the Company agreed to make certain monthly payments to Sunrise, related to amounts allegedly owed by one of the Company’s
former subsidiaries pursuant to a share purchase agreement, and in exchange Sunrise dismissed its arbitration case against the Company.
As of March 10, 2025, the Company breached its payment obligations under the settlement terms. As a result, upon breach in March 2025,
Sunrise alleges that approximately $5.7 million is immediately due and payable by the Company to Sunrise. Sunrise has commenced proceedings
to file a stipulation with the arbitrator, under which the arbitration award would be entered against the Company. The Company is defending
itself in this matter, claiming that a portion of this amount has already been repaid. The Company has accrued a liability