Dec. 21 (Bloomberg) -- Solyndra LLC, the failed solar-panel maker that got $535 million in government loan guarantees before filing for bankruptcy, won court approval of a supplemental auction of its core assets if it fails to find a buyer willing to continue operations at an earlier auction.
U.S. Bankruptcy Judge Mary Walrath today in Wilmington, Delaware, gave the company permission to hold an auction in February for a piecemeal sale of its core assets should the going concern sale fall through.
The solar-panel maker has twice delayed the auction of its business after failing to draw any acceptable bids, court documents show.
Solyndra wants to hold “one auction at the end of February for the assets that we can sell right away,” Joshua M. Fried, a lawyer for the company, told Walrath. “Some assets can be sold immediately, some have to be cleaned” or need permits to be sold, Fried said. Another auction would be held for the assets that can’t be sold right away.
The deadline for potential buyers to make an offer for the so-called turnkey sale, which is intended to sell the business as a whole and keep operating, is Jan. 17. Solyndra would hold the turnkey auction two days later if it receives acceptable bids and, if there’s a sale, a hearing on approval Jan. 23, court papers show.
The company, based in Fremont, California, sought Chapter 11 protection Sept. 6. Two days later its offices were raided by the Federal Bureau of Investigation. The solar-panel maker listed about $854.1 million in assets and about $867.1 million in debt in court papers filed Oct. 31.
Solyndra’s collapse prompted congressional scrutiny of President Barack Obama, who praised the company during a May 2010 tour of its facilities. The company faces a probe by Republicans in Congress over the federal loan guarantee it used to build a $733 million factory.
Congressional Republicans have questioned the size of government loans made to the fledgling solar-panel maker and whether the Obama administration properly evaluated its potential.
The Republicans have also questioned whether political favoritism may have played a role in awarding the government loan guarantee due to the company’s ties to an Obama fundraiser, billionaire George Kaiser.
Argonaut Ventures, the investment arm of Kaiser’s charitable organization, holds almost 39 percent of Solyndra’s parent, 360 Solar Degree Holdings Inc. Kaiser raised or bundled $50,000 to $100,000 for Obama’s 2008 presidential run.
Grand Jury Probe
In addition to the congressional probe and the FBI investigation, Solyndra has been subpoenaed by a federal grand jury, court documents show. The subpoena was disclosed in billing records submitted to the bankruptcy court by its special counsel, K&L Gates LLP.
The back-up auction would be conducted on an asset-by-asset basis or lots of similar items, according to court papers. Potential buyers would have to submit what items they intend to bid on and present proof that they have the financial wherewithal to complete the sale. The auction would be held on-site and online.
Within two business days following the end of that auction Solyndra will submit a report to the bankruptcy court detailing the winning bidders and the amounts the paid for each item.
The case is In re Solyndra LLC, 11-12799, U.S. Bankruptcy Court, District of Delaware (Wilmington).
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