Court Approves Solyndra Bankruptcy Plan Over Government Objections
Tap to Call - (877) 250-8242

Court Approves Solyndra Bankruptcy Plan Over Government Objections

November 19, 2012

By:

Share this article

SHARE

 

Finally putting an end to an extensive and heated dispute, failed solar panel maker Solyndra LLC has earned a court’s approval of its plan to exit bankruptcy, according to a Reuters report.

Under the terms of the new restructuring deal, Solyndra will pay very little of the $528 million it still owes to the United States government, which extended a $535 million loan to Solyndra shortly before the company sought bankruptcy help.

Sources say that the government will regain less than 20 percent of a portion of the loan worth $142.8 million, and will likely not recover anything from the remaining $385 million.

When accepting the proposed plan, U.S. Bankruptcy Judge Mary Walrath rejected claims by representatives for the Internal Revenue Service that the primary aim of the plan was to help Solyndra avoid paying taxes.

According to Judge Walrath, it was "clear in this case that the bankruptcy and plan of reorganization deal with more than just the preservation" of cushy tax breaks for the owners of the company.

To support her claim, Judge Walrath noted that the company has already reached settlements with unsecured creditors and with its former employees. Both of these actions, in her view, show that Solyndra was proceeding in good faith.

The company was forced to launch its bankruptcy process several months ago, when the plummeting price of solar panels and heightened competition from Chinese manufacturers left it unable to pay its bills.

In late August 2011, the company, which is based in Fremont, California, stopped manufacturing new solar panels and laid off the vast majority of its 1,100 employees.

In its bankruptcy filing, the solar energy company claimed to have $854.1 million worth of assets, but also a staggering $867 million in debt. The company’s need for debt relief became a hot political topic this fall, as opponents of the Obama Administration claimed that it served as an example of wasteful government spending.

Supporters of the government’s loan to Solyndra, however, note that the Energy Department has distributed loans to a broad range of clean energy companies, the majority of which have been quite successful.

Solyndra, however, was the first company to receive a guaranteed loan under the president’s stimulus program, so its symbolic importance has left it open to a remarkable amount of scrutiny.


Back to Newspaper Home


Tap to Call - (877) 250-8242

Copyright © 2018 MH Sub I, LLC. All rights reserved. ® Self-help services may not be permitted in all states. The information provided on this site is not legal advice, does not constitute a lawyer referral service, and no attorney-client or confidential relationship is or will be formed by use of the site. The attorney listings on this site are paid attorney advertising. In some states, the information on this website may be considered a lawyer referral service. Please reference the Terms of Use and the Supplemental Terms for specific information related to your state.Your use of this website constitutes acceptance of the "Terms & Conditions", "Supplemental Terms", "Privacy Policy" and "Cookie Policy."