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.