By Tom Hals
WILMINGTON, Del., Oct 22 (Reuters) - Solyndra, the solar
panel maker that failed despite a $528 million federal loan, on
Monday won court approval for its plan to repay creditors and
end its politically charged bankruptcy, after a judge overruled
objections by the U.S. government.
U.S. Bankruptcy Judge Mary Walrath in Delaware rejected the
government argument that the plan was improper because its main
purpose was to provide tax breaks.
Venture capital firms Argonaut Private Equity and Madrone
Capital Partners will control Solyndra's tax breaks, known as
net operating losses or NOLs, that are potentially worth $341
million after the bankruptcy.
"It is clear in this case the bankruptcy and the
reorganization dealt with many other things than the value of
the NOLs or the preservation of the NOLs," said Walrath on
Monday at a hearing in Wilmington.
Anne Oliver, an Internal Revenue Service lawyer, told the
judge that the government may appeal. Walrath granted her
request to delay the repayment plan by 10 days.
The plan calls for Argonaut and Madrone to take control of
Solyndra's parent company, which will have no employees or
operations but hold about $1 billion of net operating losses.
Argonaut and Madrone plan to use the company as a vehicle to
make investments or buy businesses, and apply those losses
against potential future profits to reduce tax liabilities.
Ordinary creditors may not fare as well. Despite selling
nearly all its assets, Solyndra expects most creditors to
recover 3 percent or less of what they are owed, far less than
in a typical corporate bankruptcy.
Solyndra's bankruptcy case continued to generate political
heat on Monday, just 15 days before U.S. elections.
Rep. Darrell Issa, a California Republican and chairman of
the House Oversight and Government Reform Committee, invoked
Solyndra in a letter on Monday to Energy Secretary Steven Chu
seeking documents relating to Fisker Automotive, maker of the
Karma plug-in hybrid car.
Like Solyndra, Fisker received a government loan through a
clean energy program. Issa demanded reassurances that the
Department of Energy took steps to protect those taxpayer funds.
Solyndra filed for Chapter 11 protection from creditors on
Sept. 6, 2011, as it and other solar panel companies were hurt
by a flood of cheap imports from China that drove down prices.
The company had received the $528 million loan as part of a
government program to promote clean energy.
Its collapse sparked an 18-month investigation by
Republicans who faulted President Barack Obama's administration
for failing to cut the government's losses.
Republicans accused the administration of making the loan in
part as a favor to George Kaiser, the billionaire founder of
Argonaut and a fundraiser for Obama's 2008 presidential
campaign.
The White House has called the decision to make the loan
"merit-based."
The case is In re: Solyndra LLC et al, U.S. Bankruptcy
Court, District of Delaware, No. 11-12799.
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