Solyndra LLC filed for Chapter 11 protection Tuesday, marking a big loss for venture capitalists who helped raise $1 billion to put the solar-panel manufacturing company into business.
Solyndra LLC filed for Chapter 11 protection Tuesday, marking a big loss
for venture capitalists who helped raise $1 billion to put the solar-panel
manufacturing company into business.
Months of work toward a hoped-for restructuring came to nothing on Aug. 30,
when a bridge loan fell through, forcing a shutdown. Solyndra has lined up $4
million worth of bankruptcy financing while it looks for a buyer or liquidates,
court papers say.
Existing stakeholders Argonaut Ventures I LLC and Madrone Partners LP are
offering the loan, which carries interest at 15% and has a term of 180 days. The
financing sets Solyndra up to compete for the attention of buyers in a market
already overloaded with shuttered solar plants, such as those of Evergreen
Solar and Spectrawatt Solar.
The company blamed "current business conditions" and a glut of solar
panels for driving down the price of its product. Solyndra also pointed to
moves by "foreign competitors" to extend their payment terms amid a
fight for survival in the solar-power industry.
By February, Solyndra was weighed down with more than $783 million in senior
secured debt and searching unsuccessfully for new strategic or financial
investors.
Some of the existing investors in what was considered the energy company of the
future have already been wiped out in the financial struggles that preceded the
early-morning bankruptcy filing in the U.S. Bankruptcy Court in Wilmington,
Del. Solyndra's private venture backers include CMEA Capital, the George Kaiser
Family Foundation, Madrone Partners, Redpoint Ventures, RockPort Capital
Partners, U.S. Venture Partners and Virgin Green Fund.
The U.S. Department of Energy is one of the largest creditors in the bankruptcy
case, pressing to reclaim a $527 million federal loan. Court papers say an
intercreditor agreement ranks the federal loan behind a $69 million loan from
lenders led by Argonaut.
Solyndra raked in the federal dollars in part in hopes it would be a major job
creator. All 1,100 full-time and temporary employees will lose their jobs in
the bankruptcy, Solyndra said in an announcement before the filing. A core
group of 113 employees are still on the payroll to assist with the
restructuring of the
Fremont
,
Calif.
,
company, court papers say.
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