Solar panel maker Solyndra has been cleared to begin a sale of the business. In a move criticized by some creditors as “rushed,” the U.S. bankruptcy court approving a plan for an Oct. 27 auction of the business, Reuters reported Tuesday. The company, which received a $535 million loan guarantee from the federal government and raised more than $700 million in venture capital funding, filed for bankruptcy protection on Sept. 6. Solyndra was backed by Argonaut Ventures, Madrone Partners, U.S. Venture Partners, Rockport Capital Partners, CMEA Ventures and Redpoint Ventures.
(Reuters) – Solar panel maker Solyndra LLC, which filed for bankruptcy after borrowing $535 million from the U.S. government, on Tuesday was cleared to begin a quick sale process that some creditors criticized as “rushed.”
U.S. Bankruptcy Judge Mary Walrath in Delaware approved the plan for an Oct. 27 auction of the business, citing the support for the plan by the Department of Energy (DOE). She also directed the company to attend a major trade show next month to find a buyer for the business.
The DOE guaranteed the government’s loan to Solyndra, which touched off a political storm after the start-up filed for bankruptcy just weeks after assuring members of Congress about its rosy outlook.
Just days after the company’s Sept. 6 bankruptcy filing, the Federal Bureau of Investigation raided Solyndra’s headquarters in Fremont, California.
Congress is investigating the role political connections played in securing the loan guarantee for Solyndra, which was visited by U.S. President Barack Obama last year. The Obama administration had thrown support behind solar and other clean energy technologies as a way of stimulating the economy.
The official committee of unsecured creditors, which represents suppliers and employees, argued that Solyndra’s sale process would discourage some bidders and should be slowed down.
“We are concerned there is a rushed sale here,” said Bonnie Fatell, a Blank Rome LLP attorney who is representing the creditors’ committee. “This is a new technology and a complex company with complex relations with vendors. To expect anyone to really have an opportunity to complete due diligence on a company that was not marketed previously is stretching the process unduly.”
Under questioning from Fatell, Solyndra’s financial adviser admitted that generally more time is better in conducting an auction. The company has not identified an initial bidder, which is the preferred way to stoke active participation.
The financial adviser, Eric Carlson from Imperial Capital, seemed unaware of an international solar conference next month in Dallas, even though 26,000 people from the solar industry would be attending.
In approving the sale process, Walrath ordered the company to send a representative to the Dallas trade show as a way to drum up interest in the company’s assets.
The case is Solyndra LLC, Case No. 11-12799, U.S. Bankruptcy Court, District of Delaware. (Reporting by Tom Hals)