Solyndra LLC, the solar-panel maker that received a $535 million U.S. Energy Department loan guarantee before filing for bankruptcy, asked a judge for more time to negotiate a reorganization plan with creditors.
Nearing the first anniversary of its Chapter 11 filing, Fremont, California-based Solyndra is seeking to extend its exclusive right to file a plan to Oct. 30, according to court documents filed today in Wilmington, Delaware.
The U.S. Energy Department and the Internal Revenue Service have objected to Solyndra’s plan and disclosure statement, a description of the proposal, demanding more information on the tax breaks the owners of Solyndra’s parent would get under a restructuring plan. The U.S. Trustee, an arm of the Justice Department that monitors bankruptcies, also objected to the plan, echoing the government’s demand for more information.
The company is seeking an extension “out of an abundance of caution” and is “continuing to consensually resolve pending objections to the plan,” Solyndra said in its fourth submission to lengthen the exclusive period, which was set to expire today. The company retains exclusivity while the request awaits court approval.
Solyndra’s collapse prompted congressional scrutiny of President Barack Obama, who praised the company during a May 2010 tour of its facilities. It was the first company to receive a loan guarantee under Obama’s stimulus.
The solar-panel maker filed a reorganization plan in July under which the U.S. might not receive anything for its $528 million claim from an Energy Department loan guarantee. The government was projected to recoup at most 17 percent on the $142.8 million portion of the loan and probably nothing on the $385 million portion.
Under the plan, Argonaut Ventures LLC and Madrone Partners LP would benefit from net operating losses that allow them to avoid potentially “hundreds of millions” in future tax liabilities at a company completely unrelated to Solyndra, the government said in court papers. The potential tax breaks could total more than half a billion dollars, according to the Energy Department’s objection.
Argonaut Ventures, the investment arm of billionaire and Obama fundraiser George Kaiser’s charitable organization, holds almost 39 percent of Solyndra’s parent, 360 Degree Solar Holdings Inc.
Solyndra listed about $854.1 million in assets and about $867.1 million in debt in court papers filed Oct. 31. It was raided by the U.S. Federal Bureau of Investigation two days after seeking bankruptcy protection Sept. 6.
The case is In re Solyndra LLC, 11-12799, U.S. Bankruptcy Court, District of Delaware (Wilmington).