Solyndra Seeks to Hire Chief Restructuring Officer After CEO Departs
Solyndra LLC, the bankrupt solar panel maker, asked for court permission to hire R. Todd Neilson as chief restructuring officer to replace its chief executive officer, who departed after refusing to answer questions posed by a congressional committee.
Neilson is needed immediately to evaluate potential asset sales and develop a reorganization plan for the company with adviser Berkeley Research Group, Solyndra said. A hearing to seek court approval is set for Oct. 17.
David Miller, a spokesman for the Fremont, California-based company, didn’t immediately return a call and e-mail seeking comment on the filing. Solyndra officials didn’t immediately return a voice-mail requesting a phone number where Harrison could be reached.
The request to appoint Neilson comes as creditors oppose the appointment of a bankruptcy trustee who would supplant management. The U.S. Trustee filed a motion seeking a Chapter 11 trustee one week after Harrison and Chief Financial Officer Wilbur G. Stover Jr. last month invoked their Fifth Amendment rights against self-incrimination and declined to testify in an inquiry by the House Energy and Commerce Committee.
Solyndra objected to the trustee proposal in court papers filed today, claiming it would only delay the end of the bankruptcy. Federal officials questioned the ability of managers to operate the company “only when Solyndra’s bankruptcy case became a political spectacle,” the company said in court papers.
Solyndra’s creditors said the move to appoint a trustee “adds to the already highly charged negative atmosphere surrounding Solyndra,” and wouldn’t help the company sell its assets. There have been “no substantiated claims of any wrongdoing,” although the U.S.’s $535 million loan to Solyndra has been “the subject of highly publicized political discussion and negative press,” creditors said.
Bankruptcy law calls for a trustee on a showing of “cause,” including gross mismanagement or fraud by current management.
Bonnie Glantz Fatell, a lawyer for creditors, didn’t immediately return a call and e-mail for comment on the decision to seek a restructuring officer. Bruce Grohsgal, a lawyer for Solyndra, declined to comment.
Neilson served in a similar capacity in the Chapter 11 case of beverage maker Le-Nature’s Inc., whose former CEO pleaded guilty to charges of masterminding an $800 million fraud. Neilson and Berkeley Research estimate their total compensation for the Solyndra case will be $900,000 to $1.1 million, according to court papers.
In September, the bankruptcy judge authorized Solyndra to auction the business on Oct. 27. In a court filing yesterday, the creditors’ committee said it is negotiating with the company for a “brief extension of the sale timelines.”
Solyndra filed for Chapter 11 reorganization on Sept. 6 and was raided two days later by the Federal Bureau of Investigation. Solyndra said assets were $859 million while debt totaled $749 million as of Jan. 1. When the petition was filed, Solyndra said secured debt was $783.8 million.
The case is In re Solyndra LLC, 11-12799, U.S. Bankruptcy Court, District of Delaware (Wilmington).
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