Judge approves Solyndra bankruptcy plan
Wednesday, October 24, 2012
DOVER, Del. (AP) — A Delaware judge is overruling government objections and approving a bankruptcy exit plan for failed solar power company Solyndra LLC.
Under the plan approved Monday, the Department of Energy stands to recover little if any of a $528 million loan to Solyndra from the Obama administration.
The plan meanwhile allows two private equity funds that control Solyndra to potentially reap hundreds of millions of dollars in tax breaks after Solyndra emerges from bankruptcy, using the company's net operating losses to offset future income.
The judge rejected arguments by the Internal Revenue Service that the plan could not be approved because its principal purpose is tax avoidance. She also overruled the DOE's objection that the plan failed to protect the agency's interest in pre-bankruptcy collateral.
A government appeal is likely.
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