Joel R. Glucksman
September 18, 2012
Solyndra has received criticism from a U.S. Trustee regarding its plans to emerge from bankruptcy and has been asked to provide more clarification about its repayment process.
U.S. Trustee Roberta DeAngelis joined the Department of Energy and the Internal Revenue Service, which have all requested that the bankrupt solar panel manufacturer provide more information about its repayment plan, which allows potential tax benefits for the two investors sponsoring the bankruptcy plan to remain intact, Reuters reports.
According to court documents filed by the IRS and Energy Department, Madrone Partners and Argonaut Ventures could potentially benefit from $500 million in future tax breaks from the bankrupt firm. This is largely because the companies could use Solyndra’s past net operating losses to avoid sizable income tax liabilities going forward.
Solyndra entered into bankruptcy protection after falling prices for solar panels put the company in financial jeopardy. After months of seeking out potential buyers for the company and its state-of-the-art facility, the distressed firm announced its plans to liquidate after no buyers came forward. In the interim, the company has sold off a number of its assets, inventory, and equipment in an effort to repay its obligations to creditors.
DeAngelis said that Solyndra should provide more details about how it plans to repay its debt, as its current strategy suggests it is favoring investors over its government creditors, which are owed roughly $528 million. Further, the trustee argued that Solyndra must clarify how its plan complies with a bankruptcy law
requirement that creditors must be paid prior to stockholders receiving money, the news source explains.
Solyndra has said it will respond to the agencies regarding its repayment plan in its own court filing in the future.