Reuters – U.S. Trustee Objects to Solyndra’s motion for more DIP funding

A United States trustee has objected to Solyndra’s motion to increase its debtor-in-possession financing, saying the solar panel maker has not shown significant progress with its plans to emerge from bankruptcy protection, Reuters reported Thursday. Solyndra, which received $535 million in federal loan guarantees, filed for bankruptcy last September as it succumbed to pressure from Chinese rivals.

(Reuters) – A United States trustee has objected to Solyndra LLC’s motion to increase its debtor-in-possession (DIP) financing, saying the solar panel maker has not shown significant progress with its plans to emerge from bankruptcy protection.

 

Solyndra, which received $535 million in federal loan guarantees, filed for bankruptcy last September as it succumbed to pressure from Chinese rivals.

 

The company, which is yet to file a reorganization plan, has failed so far to attract bids from buyers who could restart production.

 

The bankruptcy has been an election-year embarrassment for the Obama administration as Republican lawmakers jumped on it as an example of failed energy policy and government waste.

 

Solyndra, which received $4 million in DIP financing from venture capital firm Argonaut Ventures LLC, is seeking to borrow an additional $3 million to help it pay administrative expenses.

 

In her motion, U.S. Trustee Roberta A. DeAngelis said it was not clear why the company had an immediate need to pay more on professional fees, especially as there has been no sign of significant progress on a reorganization plan.

 

DeAngelis said the financing would be for “catch-up” payments to the company’s counsel, chief restructuring officer and others who went over-budget in prior periods.

 

The bankruptcy case is In re Solyndra LLC, U.S. Bankruptcy Court, District of Delaware, No. 11-12799.