{"url_path":"/sec/cik-0001883984/10-k/2026/item-3","section_key":"item-3","section_title":"Item 3 ****Legal Proceedings**","topic":"sec","document":{"doc_type":"10-K","doc_date":"2026-06-15","source_url":"https://www.sec.gov/Archives/edgar/data/1883984/0001437749-26-020545-index.html","accession_number":"0001437749-26-020545","cik":"0001883984","ticker":null,"issuer_name":"Alternus Clean Energy, Inc.","edgar_url":"https://www.sec.gov/Archives/edgar/data/1883984/0001437749-26-020545-index.html","primary_entity_key":"0001883984","primary_entity_name":"Alternus Clean Energy, Inc."},"word_count":949,"has_tables":true,"body_markdown":"**Item 3.****Legal Proceedings**\n\n \n\nFrom time to time, we may become involved in various lawsuit and legal proceedings, which arise in the ordinary course of business.  However, litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm the Company's business.  Other than the following matters, we are not aware of any such legal proceedings that will have, individually or in the aggregate, a m material adverse effect on the Company's business, financial condition or operating results.\n\n \n\nOn 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, and on June 18, 2025 an arbitration award of $5.7 million was granted to Sunrise. The Company has accrued a liability for this loss contingency in the amount of approximately $5.7 million in other payables in the financial statements.  The parties are currently in further settlement discussions and have agreed commercial terms in principle.\n\n \n\nOn January 30, 2025 CFGI LLC filed a complaint in the Superior Court of Massachusetts, claiming $358,000 is due and owed to CFGI pursuant to a services agreement by and among the parties, plus fees and costs.  CFGI and the Company entered into a settlement agreement for the contractual amount owed for services rendered in the amount of $358,000, whereby the Company agreed to pay to CFGI approximately $10,000 per month commencing June 2, 2025 for a period of three years.  The Company has failed to make all but one of the payments and on May 6, 2026 CFGI filed a request for default judgment in the amount of $358,000 and on June 4, 2026 the request was granted.  The Company has accrued a liability for this loss contingency in the amount of approximately $358,000 in other payables in the financial statements, which represents the amount owed less the one $10,000 payment made, plus fees and costs of approximately $10,000.\n\n \n\nOn March 11, 2025, the Company was served a complaint filed in the Superior Court of the State of Delaware by SPAC Sponsor Capital Access (“SCAF”), claiming that approximately $1.5 million is due and owed to SCAF pursuant to a settlement agreement by and among the parties, plus costs, expenses, legal fees, interest and damages, if proven. On July 10, 2025 the Company was notified that the Superior Court of the State of Delaware granted a motion of summary judgment for $1.5 million due under a settlement agreement, plus interest to date in the amount of approximately $225,000, plus attorney’s fees of approximately $26,000. The Company has accrued a liability for this loss contingency in the amount of approximately $2.0 million at December 31, 2025 which represents the contractual amount allegedly owed plus legal costs and accrued interest. It is reasonably possible that the potential loss may exceed our accrued liability due to costs, expenses, legal fees, interest and damages that are also alleged by SCAF as owed. The parties are currently in further settlement discussions.\n\n \n\n28\n\n \n\n \n\nOn May 8, 2025, the Company, Alternus Energy Group PLC (AEG) and one of AEG’s subsidiaries, Alternus Energy Americas Inc. (AEA), was served a Demand for Arbitration through JAMS in Washington DC by Orrick, Herrington and Sutcliffe LLP (“Orrick”), claiming that approximately $1 million is due and owed to Orrick pursuant to an engagement agreement entered into with AEA, plus interest.  In February of 2026, Orrick withdrew its claims, and the arbitration was discontinued.  Orrick has threatened to commence an action in state court against the Company and AEG and AEA, but to the Company's knowledge, no such action has been commenced.  If an action is commenced, the Company intends to vigorously defend itself in this matter and intends to file a motion to dismiss itself from the arbitration as the Company was not a party to this engagement agreement, nor is AEA a subsidiary of the Company.\n\n \n\nOn May 30, 2024, the Company was served a complaint filed in the Circuit Court for Fairfax County, Virginia, by Morgan Franklin Consulting LLC (\"MF\"), claiming $276,796 is due and owed to MF pursuant to a Master Services Agreement by and among the parties.  In October of 2024, MF and the Company entered into a settlement agreement for the contractual amount owed for services rendered through the payment of twelve equal monthly installments commencing immediately, but the Company failed to make any payments.  On September 22, 2025, the Court granted summary judgment to MF for the amount claimed as owed. Subsequently, on February 6, 2026 the Court granted MF's motion for late fees in the amount of $153,949.  The Company has accrued a liability for this loss contingency in the amount of approximately $430,746 at December 31, 2025, which represents the contractual amount owed plus late fees. The parties are currently in payment plan discussions."}