Though fought on a number of fronts by creditors, the Internal Revenue Service, the Department of Energy and local officials near its home base in California, Solyndra has seen its bankruptcy plan confirmed in the U.S. Bankruptcy Court for the Third Circuit Third District.
U.S. Bankruptcy Court Judge Mary Walrath Wednesday confirmed Solyndra’s plan, one that will see private equity holders getting the overwhelming majority of the remaining assets and the firm itself no longer operating, even as she intimated there almost surely would be an appeal filed by detractors including the federal government. Among other objections, perhaps the most significant, Walrath brushed aside an IRS complaint that groups of investors who bought into the company as it was failing would gain an “unfair” tax benefit of upwards of $341 million. She noted that investors were doing nothing illegal and that such tax benefits were not a significant factor driving the need for bankruptcy proceedings regarding Solyndra, which thoroughly documented its problems remaining competitive against lower-cost Asian competitors and in an oversaturated U.S. solar products market suffering from lessening U.S. consumer demand.
Solyndra remains under federal investigation for fraud and under the political campaign spotlight because of its ties to key Obama Administration fundraisers. Before going bust, the firm garnered more than $500 million in federal alternative energy grants, the bulk of which will not be repaid to the federal government. The Romney Campaign continues to air the issue, much like the Obama Administration has dogged the Republican candidate over the “Let Detroit Go Bankrupt” Op-Ed regarding automotive insolvencies.
-Brian Shappell, CBA, NACM staff writer