Solyndra backers could reap big tax breaks; U.S. wants details

WASHINGTON, Tue Aug 28, 2012 – Two investment firms could walk away from the bankruptcy of solar panel maker Solyndra LLC with hundreds of millions of dollars in future tax breaks, the U.S. government said in court papers seeking more information on the arrangement.

Units of Argonaut Ventures and Madrone Partners could end up with “significantly more” than $500 million in tax benefits as part of Solyndra’s bankruptcy, the Department of Energy and the Internal Revenue Service said in a bankruptcy court filing on Friday.

Under the bankruptcy plan, the U.S. government is unlikely to recoup much of its $528 million loan to Solyndra.

The government agencies asked the U.S. Bankruptcy Court in Wilmington, Del., to reject Solyndra’s “disclosure statement,” which describes its plan to repay creditors, unless the company provides more details on the tax benefits.

Under the proposed plan, tax benefits such as “net operating losses” would be preserved for Argonaut, which is controlled by a foundation linked to billionaire George Kaiser, and Madrone. Under a 2011 restructuring, the two firms committed to investing $75 million to keep Solyndra afloat with the condition they would be repaid before the U.S. government.

“Argonaut and Madrone could potentially use Solyndra’s net operating losses to avoid hundreds of millions of dollars in future income taxes that they would owe on income generated by business ventures wholly unrelated to the debtors,” the government agencies said in the filing.

Ford will launch a refashioned MKZ sedan in the United States this year in a bid to attract younger, more affluent buyers. Much of the design, including push-button transmission, was influenced by Chinese consumer tastes.

“We’re trying to revitalize the Lincoln brand image and the sales and satisfaction image in the U.S.,” said Dave Schoch, chairman and CEO of Ford Motor China. “Here we have a clean sheet of paper. We don’t have the legacy issues.”

Despite slowing growth in new vehicle sales, China has already overshot the United States as the world’s largest auto market. By 2020, analysts expect luxury sales in the country will surpass those in the United States.

By 2015, Ford aims to double its production capacity and dealers in China. Executives, including CEO Alan Mulally, flew to Ford’s manufacturing hub in Chongqing earlier this week to mark the groundbreaking of a third assembly plant.

Solyndra fails to garner turnkey bids for sale

WILMINGTON, Del. ― Solyndra LLC failed to attract any bids on Tuesday from buyers who could have restarted production, brought back some laid off staff and kept the bankrupt solar panel maker operating, according to a company adviser.

Solyndra, which owes more than $500 million to the U.S. government, has said a turnkey buyer is the best hope for getting the most money for the government and other creditors. However, no turnkey bids were submitted by a Tuesday deadline, said company adviser Eric Carlson of Imperial Capital LLC.

Court documents suggest that auctioneers who have already been retained will soon begin a piecemeal sale of the remaining production equipment and real estate.

Solyndra collapsed into bankruptcy in September, unable to compete with plummeting prices for solar panels. The company has been an ongoing political headache for President Barack Obama, who visited the company in 2010 to bolster his standing as a creator of renewable energy jobs.

Republican lawmakers are investigating possible favoritism in approving the government’s $535 million loan to the company, which counted among its investors George Kaiser, an Obama fundraiser.

A spokesman for Kaiser has said he did not discuss with the government the loan to Solyndra.

Separately, laid-off staff of Solyndra are fighting the company’s request to pay unnamed employees $500,000 in bonuses.

Solyndra asked for bankruptcy court approval for the payments earlier this month, saying the bonuses will ensure it can retain the 21 staff to complete tax filings and the sale of the company.

The bonus request has been opposed by the roughly 1,000 staffers that were laid off in August, when the company abruptly halted production.

The laid-off workers argued that until Solyndra discloses who is receiving the payments, the bonus request will appear “only to be in the best interests of senior management, the secured lenders and corporate insiders.”

Solyndra’s bankruptcy lawyer, Debra Grassgreen, did not return a call for comment.

Bankrupt panel maker Solyndra eyes fallback plan to sell machinery

WILMINGTON, Del. ― Solyndra LLC, the bankrupt solar panel maker that owes $500 million to the U.S. government, plans to auction off its machinery in January if it does not get bids for the entire business by an extended deadline.

Solyndra said last week that an initial deadline passed without any satisfactory bids to buy the entire company and restart production, damping hopes that some of its 1,000 idled workers might be rehired.

The company’s advisers have focused on selling the business as a whole as the best way to generate money to repay creditors.

Solyndra filed for bankruptcy in September as panel prices have plummeted due to a glut of supply. The company had a $535 million loan that was guaranteed by the Department of Energy.

The company’s failure has been an embarrassment for the White House after President Barack Obama visited the company last year. His administration has promoted clean energy as one way to create jobs.

Solyndra will file a motion as soon as Tuesday evening for permission to sell its equipment at an auction in mid-January, Debra Grassgreen, the company’s attorney, told a bankruptcy court hearing.

If a buyer for the entire business emerges, then the machinery auction would be unnecessary, Grassgreen said.

Solyndra’s advisers still hold out hope they may strike a deal to sell the business as a going concern. Todd Neilson, Solyndra’s chief restructuring officer, said after the hearing that Solyndra did receive bids for the business, but said he would not describe them as serious bids.

Solyndra’s headquarters were raided by the Federal Bureau of Investigation shortly after it filed for bankruptcy, and Congress is investigating if political connections played a role in approving the loan guarantee.

Neilson said he sensed that potential bidders were being driven away by politics as well as the depressed market for solar businesses.

Solyndra CEO Brian Harrison leaves failed solar panel maker

WILMINGTON, Del. ― The chief executive of Solyndra, a failed solar panel maker with a $535 million federal government loan guarantee, has left the company, according to documents filed by the company in bankruptcy court.

Brian Harrison “left the company as scheduled on Oct. 7,” the company said in documents filed on Tuesday at the Delaware bankruptcy court, giving no further details.

A company spokesman could not be reached immediately for comment.

The House Energy and Commerce Committee is investigating the downfall of the company, which received the $535 million loan guarantee from the Energy Department and has become a political embarrassment for the Obama administration.

Harrison joined the start-up company shortly after it canceled an initial public offering last year, and was in charge as it struggled to find cash to keep operating, and restructured its debt.

He angered lawmakers on Capitol Hill after he painted a rosy picture of the company’s prospects only weeks before the company filed for bankruptcy.

Harrison appeared as a witness before the panel last month, but refused to answer questions, invoking his right against self-incrimination provided by the Fifth Amendment to the Constitution.

The company was raided by the FBI after it filed for bankruptcy, and the FBI also visited Harrison’s home.

In its Tuesday filing, Solyndra asked the court to approve Todd Neilson of Berkeley Research Group as its restructuring officer.

U.S. solar firm Solyndra files for bankruptcy protection

FREMONT, Calif. ― Solyndra LLC, a solar panel maker which had earlier received $535 million in federal loan guarantees, filed for Chapter 11 bankruptcy protection early on Tuesday, making it the third U.S. solar firm to succumb to pressure from lower-cost Chinese rivals.

In a filing with the Delaware bankruptcy court, the company listed assets and liabilities in the range of $500 million to $1 billion. Companies usually try to reduce the debt level and reorganize business operations through the Chapter 11 bankruptcy route.

Solyndra is the third U.S. solar company to seek bankruptcy protection in the recent past. Former Wall Street high flyer Evergreen Solar Inc filed for Chapter 11 two weeks ago, followed four days later by SpectraWatt Inc, a private company that was backed by Intel Corp.

In a statement last week, Solyndra said it could not compete with bigger overseas rivals. Earlier this year, cuts to generous solar subsidies in No. 2 market Italy stalled development of solar projects and led to a global glut of solar panels that sparked a 25 percent drop in prices.

Even industry heavyweights such as China’s Suntech Power Holdings Co Ltd and U.S.-based First Solar Inc are struggling with dwindling profits, while small, up-and-coming solar companies are finding it increasingly difficult to stay afloat.