Solyndra: Bankruptcy Despite $535 Million DOE Loan

 

The company is currently under investigation by the Federal Bureau of Investigations, with visits to the homes of the company’s chief executive, a founder, and a former executive, examining computer files and documents, according to the Center for Public Integrity.

 

The company will file a petition for relief under Chapter 11 of the U.S. Bankruptcy Code while it evaluates options, including a sale of the business and licensing of its CIGS technology and manufacturing expertise. Solyndra’s bankruptcy resulted in the layoff of 1,100 full-time and temporary employees on August 31.

 

In 2009, the company was the first to receive an offer for a U.S. Department of Energy loan guarantee under Title XVII of the Energy Policy Act. The $535 million loan guarantee from the U.S. Treasury’s Federal Financing Bank was for the company to expand its solar panel manufacturing capacity in California.

 

“Despite strong growth in the first half of 2011 and traction in North America with a number of orders for very large commercial rooftops, Solyndra could not achieve full-scale operations rapidly enough to compete in the near term with the resources of larger foreign manufacturers,” a company statement said. “This competitive challenge was exacerbated by a global oversupply of solar panels and a severe compression of prices that in part resulted from uncertainty in governmental incentive programs in Europe and the decline in credit markets that finance solar systems.”

 

Solyndra president and CEO Brian Harrison thanked employees, investors, customers and suppliers for the years of support.

 

“Distributed rooftop solar power makes sense, and our customers clearly recognize the advantages of Solyndra systems,” Harrison said. “Regulatory and policy uncertainties in recent months created significant near-term excess supply and price erosion. Raising incremental capital in this environment was not possible. This was an unexpected outcome and is most unfortunate.”

 

 

The company is currently under investigation by the FBI for a possible misuse of federal funds.

Agents visited the homes of CEO Brian Harrison and company founder Chris Gronet, and a third executive involved in the company from the start, according to a source who agreed to speak to the Center’s news team only on condition of anonymity due to the legal sensitivity of the situation.

 

Gronet confirmed that his home was visited by federal agents on Thursday, but declined to comment further.

 

Solyndra spokesman David Miller confirmed agents visited Harrison’s home on Thursday, when the FBI and Energy Department Inspector General arrived at the company’s headquarters in Fremont, Calif., and seized boxes of records.

 

Julie Sohn, spokeswoman for the FBI in San Francisco, declined to discuss details of the raid or the government’s investigation.

 

The raid and visits come amid “increasing evidence” the Justice Department and Inspector General are exploring whether Solyndra misled the government in securing its $535 million, and in landing a vital refinancing of that loan earlier this year, according to the Center’s report.

 

Beginning in March, iWatch News, in partnership with ABC News, reported on questions about the role political influence may have played in Solyndra’s selection as the Obama administration’s first loan guarantee recipient.

 

The Center’s news team reported that one of the lead private investors in Solyndra was an Oklahoma billionaire who served as an Obama "bundler," raising money during the 2008 presidential campaign, and who is a frequent visitor to the White House.

 

Members of Congress leading a House investigation of the Energy Department loan have focused specifically on visits Harrison made to Washington in July, when he said the company was on sound footing and expanding.

 

The bankruptcy was “a stinging collapse for the Obama administration, which has made the loan a showpiece as its first investment in job-creating green energy technology,” according to the group.