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Another green-energy company that received federal funding had their Chapter 11 bankruptcy plan approved by a federal judge today. Solar panel manufacturer Solyndra filed for Chapter 11 bankruptcy in the fall of 2011, and immediately suspended all business operations.
Solyndra was once touted as a cutting-edge manufacturer of solar photovoltaic systems. The company developed solar panels that were cylindrical tubes, as opposed to the traditional flat panels. The designers believed that this design allowed the panels to absorb light from any direction, thereby increasing energy output. The product was intended to be used on large, low-slope commercial rooftops.
As part of a larger green-energy stimulus package, Solyndra received a federal loan of $528 million to develop a new factory close to its Fremont, California headquarters. A steep dip in the price of silicon, from which traditional solar panels are made, resulted in Solyndra being unable to compete with its competitors. On September 1st, 2011, the company ceased all business activity and filed for Chapter 11 Bankruptcy.
The company also faces a class-action suit from its former employees, who claim that Solyndra violated state and federal law by laying them off without providing 60 days notice. They seek 60 days pay, 401(k) contributions and health benefits.
In court documents, the company lists $859 million in assets and $784 million in secured loans. The federal government is the company’s biggest creditor, but it may be some time until tax payers seen any return on their investment. The Chapter 11 plan calls for Solyndra’s parent company to be taken over by venture capital firms Argonaut Private Equity and Madrone Capital Partners, who say they plan to use the company to invest and acquire new assets, as well as use Solyndra’s $1 billion net operating losses against any future profits to reduce tax liabilities.
At issue in the bankruptcy filing was the government’s objection that the plan’s main purpose was to provide tax breaks. Madrone and Argonaut will control those breaks, potentially valued at $341 million after the bankruptcy.
The recent failings of Solyndra and other green-energy companies that received federal funding have become an election issue, with republicans claiming that the failings are indicative of the Obama’s administration wasteful and reckless investment in untested energy.
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