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Solyndra LLC on Friday won approval to seek creditors' votes on its reorganisation plan

2 Sep 2012
U.S. Bankruptcy Judge Mary Walrath is scheduled to consider approving the plan at an Oct. 17 hearing. Creditors have until Oct. 10 to vote on the plan, as well as to object to approval of the proposal.

Solyndra has already addressed objections from the government and U.S. Trustee Program by adding information to the disclosure statement -- the terms of the plans to creditors -- about potential tax breaks for investors in Solyndra's parent, 360 Degree Solar Holdings Inc. Those tax breaks could reach as high as $341 million.

While Solyndra would be liquidated under the plan, 360 Degree would carry forward a net operating loss of as much as $975 million to use against future income, according to court papers. The government, meanwhile, could get nothing for its $528 million claim from the loan guarantee under the restructuring plan. At most, the government is projected to recoup $142.8 million of the loan and likely nothing on the remaining $385 million, according to the disclosure statement.

In February 2011, facing stiff competition from foreign firms, Solyndra was forced to restructure its debt in order to win a fresh infusion of funds from investors. That restructuring knocked down the priority of the government's debt in repayment. The investors stand to recover at least 55 percent of their $69 million loan to the solar startup and could see it all (Michael Bathon, Bloomberg, Sept. 7).  

Taxand's Take

Taxand's Take Author