Solar company Solyndra says its CEO resigned
Friday, October 14, 2011
DOVER, Del. (AP) — The chairman and CEO of a California solar energy company that sought bankruptcy protection after receiving a half-billion-dollar loan guarantee from the Obama administration has resigned.
Solyndra Inc. said in papers filed in Delaware bankruptcy court Wednesday that Brian Harrison resigned last Friday.
Attorneys for Fremont, Calif.-based Solyndra said Harrison’s resignation was contemplated even before the bankruptcy filing and was “consistent with the company’s budget and status of its wind-down effort.”
Solyndra provided few other details in its court filing. A company spokesman did not immediately return a telephone request for comment Thursday.
Solyndra said Harrison’s position superseded by the appointment of a chief restructuring officer. Solyndra’s choice for CRO, which is subject to court approval, is R. Todd Neilson, a director of Los-Angeles-based Berkeley Research Group LLC.
According to court papers, Neilson’s previous bankruptcy clients include rap mogul Marion “Suge” Knight’s Death Row Records, boxer Mike Tyson and Pennsylvania-based beverage company Le-Nature’s, which sought bankruptcy protection in 2006 amid financial fraud allegations that resulted in its CEO and several other people being convicted or entering guilty pleas.
Solyndra’s court filing came in response to a motion by the Justice Department to appoint a trustee to oversee the bankruptcy case.
The U.S. bankruptcy trustee requested the appointment of a Chapter 11 trustee after Harrison and Solyndra chief financial officer W.G. Stover, citing an ongoing FBI investigation, refused to testify before a House subcommittee investigating the loan guarantee Solyndra received in 2009 from the Department of Energy.
The U.S. trustee also expressed concern that Solyndra officials refused, in an initial debtor interview after the bankruptcy filing, to disclose information about the company’s contracts with customers.
Solyndra and Argonaut Ventures I, a private investment group that holds a 39 percent stake in Solyndra’s parent company and is providing bankruptcy financing for Solyndra, both objected to the appointment of a trustee.
Solyndra described the motion for a trustee as an “extraordinary overreaction” by the Justice Department to the “political tempest” that has swirled around Solyndra since its Sept. 6 bankruptcy filing — a filing the company claims came as no surprise to federal officials.
“Three days after the bankruptcy filing, armed FBI agents in bulletproof vests (acting in conjunction with the DOE’s inspector general) staged an unannounced (but televised) raid on Solyndra’s offices, fostering the impression that management misdeeds are to blame for the default on the DOE loan and that Solyndra’s bankruptcy was a hostile act, when in fact the DOE had inside access to financial information and management plans and was fully aware of the impending bankruptcy,” Solyndra attorney Bruce Grohsgal wrote.
Grohsgal also said in the court filing that one or more DOE representatives had attended all Solyndra board meetings since February, when officials agreed on a loan restructuring that resulted in private investors moving ahead of taxpayers for repayment in case of default.
In a statement released by Solyndra after the February loan restructuring, Harrison said the company had “excellent marketplace momentum” and was confident it was on track to be “cash flow positive at the end of this year.”
Harrison joined Solyndra in July 2010, just over a year before the bankruptcy filing. Prior to Solyndra, he was president and CEO of flash memory chip maker Numonyx BV, a company created by Intel, STMicroelectronics and investment company Francisco Partners. Before Numonyx, Harrison served as an executive in Intel’s flash memory group.
Solyndra was the first renewable-energy company to receive a loan guarantee under a stimulus-law program to encourage green energy and was frequently touted by the Obama administration as a model. President Barack Obama visited the company’s Silicon Valley headquarters last year, and Vice President Joe Biden appeared by satellite at its groundbreaking.
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