Oct. 25--CONCORD -- A federal judge has denied GT Solar's request to dismiss a lawsuit charging the company failed to warn investors that its biggest client was taking its business elsewhere.

Judge Joseph LaPlante of the U.S. District Court in Concord issued the ruling earlier this month, which means the case will now move forward. GT Solar has 30 days to respond to the initial complaint.

GT Solar, headquartered in Merrimack, makes furnaces and other equipment that's used to make components of solar power systems.

On July 24, 2008, the company raised $500 million in its initial public offering.

The next morning, though, the company's biggest customer, LDK Solar Co., announced it had signed contracts to buy furnaces from JYT Corp. in China, one of GT Solar's biggest competitors.

GT Solar's stock fell from its initial offering of $16.50 a share on July 24, 2008, closing at $12.59 on July 25, 2008. It hit a low of $9.30 a share that same day before partially rebounding.

The Arkansas Public Employee Retirement System then brought a class-action lawsuit against GT Solar and a number of its directors and officers, plus the venture capital firms that control some interest in GT Solar.

The Arkansas group claimed GT Solar failed to disclose a "substantial likelihood" that its biggest customer was going to stop buying furnaces from the company, violating the federal Securities Act of 1933.

GT Solar moved to dismiss the lawsuit on grounds that there wasn't enough evidence to support the claim, but LaPlante disagreed in court documents.

"GT Solar's generalized statements about potential lost customers and sales did not specifically warn against the implication that it would very soon lose its biggest customer for DSS furnaces and, with it, most of that product's sales," he wrote.

Karen Lovett can be reached at 594-6402 or klovett@nashuatelegraph.com.

-----

To see more of The Telegraph or to subscribe to the newspaper, go to http://www.nashuatelegraph.com.

Copyright (c) 2009, The Telegraph, Nashua, N.H.

Distributed by McClatchy-Tribune Information Services.

For reprints, email tmsreprints@permissionsgroup.com, call 800-374-7985 or 847-635-6550, send a fax to 847-635-6968, or write to The Permissions Group Inc., 1247 Milwaukee Ave., Suite 303, Glenview, IL 60025, USA.

NASDAQ-NMS:SOLR, NYSE:LDK,

A service of YellowBrix, Inc.