IRS, DOE question Solyndra bankruptcy plan
BY RANDALL CHASE Associated Press
Wednesday, August 29, 2012
8/29/12 at 3:15 AM
See all of the coverage on
the Solyndra bankruptcy and investigation. Original Print Headline: Solyndra bankruptcy plan raises questions
DOVER, Del. - Solyndra LLC should provide more information about tax breaks that could be worth hundreds of millions of dollars to private equity firms that control the failed solar power company, government lawyers said in a court filing.
Attorneys for the Department of Energy and the Internal Revenue Service filed court papers last week objecting to a disclosure statement filed by Solyndra with its bankruptcy reorganization plan. Solyndra received a $528 million loan from the Obama administration before filing for bankruptcy protection last year.
The DOE and IRS contend that the investment firms, including one linked to George Kaiser of Tulsa, could use Solyndra's past net operating losses to avoid huge income tax liabilities in the future.
Government lawyers say Solyndra needs to provide more information on the tax breaks that could benefit the sponsors of Solyndra's bankruptcy plan, Argonaut Ventures I LLC and Madrone Partners LP.
The lawyers say the net operating losses could be "significantly more" than $500 million, adding that the investment firms could use those losses to reduce future tax liabilities on income from sources totally unrelated to Solyndra.
"This could potentially enable Argonaut and Madrone to avoid hundreds of millions of dollars in future income tax liabilities," they wrote.
Solyndra bankruptcy attorney Bruce Grohsgal did not immediately reply to an email seeking comment Tuesday.
Fremont, Calif.-based Solyndra in 2009 became the first renewable-energy company to receive a loan guarantee under a stimulus program to encourage green energy and was touted as a model for creating green jobs. The company filed for bankruptcy protection in September 2011 and laid off its 1,100 employees, spurring investigations both by the FBI and Republicans in Congress.
Argonaut, which holds a 39 percent stake in Solyndra's parent company and joined with Madrone to provide bankruptcy financing for Solyndra, is an investment vehicle of the George Kaiser Family Foundation. Argonaut reportedly had invested $400 million in Solyndra.
Kaiser, a billionaire oilman who has contributed to President Barack Obama, has said he had no part in helping Solyndra win a government loan.
As part of a February 2011 loan restructuring by Solyndra, Argonaut and Madrone provided some $70 million in financing that stands ahead of the money owed to U.S. taxpayers in repayment priority.
In addition to more information about the tax breaks, government lawyers are seeking clarification of Solyndra's remaining obligations under the 2011 debt restructuring.
As part of the restructuring, some $175 million in convertible debt was purportedly exchanged for $187 million in new notes.
The DOE and IRS are seeking clarification on disposition of the original $175 million in notes, including whether they were canceled or voided or remain outstanding debt obligations and an asset of Solyndra's bankruptcy estate.
Associated Images:
FBI agents carry boxes of evidence from the Solyndra headquarters in Fremont, Calif., in 2011. The solar firm received a $528 million loan from the federal government before filing for bankruptcy. Associated Press file
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