U.S. almost became a part owner of Solyndra
Every few days a new, troubling detail emerges from the ongoing saga of now defunct, loan guarantee darling Solyndra. This latest one falls into the it-could've-been-worse-for-taxpayers category.
Days before solar panel maker Solyndra filed for bankruptcy protection, the Obama Administration considered another debt restructuring that would have made the U.S. government a 40 percent owner of the company, the New York Times reported. The plan was discussed in email messages provided to House investigators.
Lazard, the same firm hired by the Energy Department to evaluate options after Solyndra had borrowed almost all of a $535 million line of credit extended by the government, drafted the reorganization plan. According to NYT, the government would have converted the amount it was owed into equity.
Lazard recommended the move after it projected Solyndra could market its modules for more than what it cost to manufacture them by late 2012 and could become profitable by 2015. It isn't clear what data Lazard used for its projections. But profitability was a long shot, at best. As I have, and others, have noted, the Solyndra's business model was doomed to fail. The price of photovoltaic panels have dropped precipitously in the past year. Solyndra's innovative solar tech simply couldn't compete on price.
Bonuses for top execs!
And there's mounting evidence that the company was mismanaged. Dana Hull of the San Jose Mercury News uncovered all sorts of troubling information tucked inside Solyndra's bankruptcy documents. For example, more than a dozen senior execs collected bonuses up to $60,000 apiece as the company was hemmoraging cash and was well on its way towards bankruptcy. A couple of months after the last round of bonuses were distributed, Solyndra filed for bankruptcy and about 1,100 employees were laid off with severance pay.
[via The New York Times]
Photo: Flickr user Brooks Elliott, CC 2.0
Related:
- Another DOE loan guarantee recipient files for bankruptcy
- Solyndra probe extends to three more solar companies
- DOE loan chief Jonathan Silver resigns
This post was originally published on Smartplanet.com