Solyndra LLC, a solar-panel maker, filed for Chapter 11 bankruptcy protection September 6, 2011. Solyndra has lined up $4 million worth of bankruptcy financing while it looks for a buyer or liquidates. A bankruptcy judge has given Solyndra one month to find a buyer, but that may not be easy since the market is already overloaded with closed solar plants. (Evergreen Solar Inc. and SpectraWatt Inc., both filed for bankruptcy protection in August 2011).
One reason the bankruptcy is notable is that in March 2009, Solyndra received a $535 million loan guaranteed by the Department of Energy. The House Energy and Commerce Committee was concerned about the loan and sent a letter to Energy Secretary Steven Chu in February 2009 questioning whether Solyndra was the right company to receive the loan since it had already had some financial difficulties. The Department of Energy granted the loan anyway.
In March 2010, Solyndra’s external auditor questioned whether it could survive.
In May 2010, President Obama visited the company and said it was a model investment by the government.
Solyndra never turned a profit. It laid off employees in November 2010.
In February 2011 Solyndra underwent an out-of-court restructuring in which the Department of Energy agreed that in the event of a default and liquidation, the government would be paid after private creditors. This is highly unusual since the US is usually the most senior creditor (they get paid first) in any type of loan guarantee.
The FBI raided Solyndra’s headquarters on September 8, 2011. The company is now under a criminal investigation to determine whether its executives knowingly misled the government to get the $535 million loan. There is also some question about the fact that one of the largest investors in the company is the George Kaiser Family Foundation. George Kaiser was a high volume contributor to Mr. Obama’s 2008 campaign.