In November 2008, JA Solar Holdings Co., Ltd. (NASDAQ: JASO) wrote off $100 million in 3-month index-linked note it had issued that was guaranteed by Lehman Brothers’ European subsidiaries and that were to mature in October of that year. The company’s share price fell to around $2, its lowest level since coming public. The company was also the target of a class action suit in December 2008 as a result of the write-down.

Today the company is reporting that it has sold the notes to an unspecified buyer for $34.6 million, and the company will record a gain of that amount in its fourth quarter earnings. The EPS gain is estimated to be $0.21.

JA Solar isn’t out of the woods yet, though, regarding its dealings with Lehman. The company had lent Lehman’s European division 6.56 million new shares, due in 2013, in a capped call transaction. The company said at the time that it would wait to see what happened in 2013, but in the meantime would treat the shares as non-outstanding.

The exposure to Lehman hurt JA Solar a lot. But they were not alone. Evergreen Solar Inc. (NASDAQ: ESLR) got pounded even harder. Lehman was the underwriter for a $373.75 million convertible note offering for Evergreen, and the company lent Lehman nearly 31 million new shares in another capped call transaction. Evergreen wrote off various costs to the tune of $39.5 million. As with JA Solar, the shares were to be returned in 2013.

Worse for both companies is that if they can’t recover the shares in 2013, each faces dilution of their common shares outstanding. JA Solar would be diluted by about 4%, while Evergreen’s dilution would be about 20%.

As might be expected, JA Solar shares are up more than 2% in early trading today. And yes, the fact that the company found a buyer for the Lehman note is a good thing. But the story’s hasn’t yet come to the final chapter. That’s still a couple of years away.

Paul Ausick

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