A major fundraiser for President Obama's reelection campaign appears to be the biggest winner from a ruling by the U.S. Bankruptcy Court in Wilmington, Delaware, last week in favor of an exit plan for Solyndra LLC, the failed manufacturer of solar panels and the recipient of a $535 million government-guaranteed loan under the President Obama's economic stimulus plan, passed by Congress in 2009. Losers include the American taxpayers, whose combined losses from the failed loan and the bankruptcy settlement could be nearly $850 million, according to the chairman of the House Oversight and Government Affairs Committee.
The October 22 ruling by Judge Mary Walrath left the parent company, 360 Degree Solar Holdings, with net operating loss carryforwards — called "tax assets" by the Internal Revenue Service —-- of between $875 million and $975 million, that may be used as tax writeoffs against future earnings. The reorganization plan was opposed in court by both the Department of Energy, which had approved the loan guarantee, and the Internal Revenue Service, which said the loss carryforwards could result in as much as $341 million in lost revenue resulting from what the IRS described as a tax avoidance vehicle for 360 Degrees investors. That could push the taxpayer loss from the "green energy" loan to as much as $849 million, House Oversight Chairman Darrell Issa, (R-Cal) said in a letter to Secretary of Energy Steven Chu, Issa criticized the Department of Energy for what he called its "last-ditch effort to extend the life" of the solar panel manufacturer by having agreed in 2010 to restructure the loan in exchange for a fresh infusion of capital from the company's major investors.
"Specifically," wrote Issa, "Solyndra's largest investors, Argonaut Ventures, LLC (Argonaut) and Madron Partners, LP (Madron) loaned $75 million in return for successfully diminishing DOE's loan priority and eliminating DOE's equity in the case of Solyndra's bankruptcy." The deal gave the holding company's net operating losses priority over the government's claim on its loan, Issa said.
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Photo: Solyndra facility in Fremont, California, with a For Sale sign on it.