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U.S. Trustee Latest to Object to Solyndra Bankruptcy Debacle

Posted on in Bankruptcy

The U.S. Trustee became the latest government agency to criticize Solyndra LLC's plan to repay its debts, saying the bankrupt solar panel maker should disclose whether it is favoring venture capital investors over creditors.

The U.S. Trustee for Delaware, New Jersey and Pennsylvania, an agent of the Department of Justice, said in a court filing that Solyndra should provide more information about the repayment plan, which preserves potential tax benefits for the two investment funds that are sponsoring the bankruptcy plan.

Earlier this week, the Department of Energy and the Internal Revenue Service also demanded more details about the tax benefits. The two agencies said in a court filing that the Madrone Partners and Argonaut Ventures funds stood to gain more than $500 million in future tax breaks from the Solyndra bankruptcy.

At the same time, Solyndra has said in court filings that many creditors, including the U.S. government, would probably end up receiving little to nothing of what they are owed. The government loaned the company $528 million as part of a program to support clean energy startups.

Debra Grassgreen, a lawyer with the firm which represents Solyndra, did not immediately respond to a request for comment. She said earlier this week that the company would reply to the objections with its own filing at the bankruptcy court.

The U.S. Trustee, Roberta DeAngelis, said in a filing with Delaware's bankruptcy court on Tuesday that Solyndra should explain how its plan complies with the bankruptcy requirement that creditors be paid in full before stockholders get any money.

DeAngelis also criticized the company for not providing more information about the reorganized entity that would exit bankruptcy, given that Solyndra is liquidating.

Solyndra filed for bankruptcy on Sept. 5 due to plunging prices for solar panels. The company failed to find a buyer to keep its operations going and has since sold everything from inventory to its office equipment to raise money for its creditors

If you are thinking of filing for bankruptcy or know that you will have to do so, make sure you have all the legal aspects covered. Your bankruptcy might not involve thousands of workers or a workers' union, but an attorney can be invaluable in your bankruptcy. Ensure yourself a better outcome in your bankruptcy proceedings, and contact one of our knowledgeable bankruptcy lawyers in Lake County today.

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