"insult to injury"
Solyndra Receives Court Approval For Bankruptcy And Liquidation Plan
by SI Staff on Tuesday 23 October 2012
Failed thin-film PV manufacturer Solyndra has received approval from a bankruptcy judge in Delaware to implement its plan to exit court protection and liquidate the business.
Approval was granted despite objections raised by the U.S. Internal Revenue Service (IRS). According to Bloomberg, the IRS had argued that Solyndra's plan allowed the parent company, 360 Degree Solar Holdings Inc., to escape with tax breaks of up to $341 million. 360 Degree Solar will be allowed to use net operating loss carry-forwards totaling up to $975 million against future income.
U.S. Bankruptcy Judge Mary Walrath, however, rejected the IRS' challenge, noting that tax avoidance was not the "primary" purpose of Solyndra's plan, as submitted.
Solyndra is best known for its $535 million loan guarantee from the U.S. Department of Energy, which was thoroughly investigated by lawmakers after the company went bankrupt last year. The U.S. government is expected to recover little of its investment under Solyndra's bankruptcy plan, according to Bloomberg.
The U.S. House of Representatives' Oversight and Investigations Subcommittee Chairman Cliff Stearns, R-Fla., who spearheaded the Solyndra loan guarantee investigations, described the newly approved bankruptcy plan as "insult to injury."
"The Solyndra nightmare continues with today's ruling that gives Solynda's investors, including billionaire Obama supporter George Kaiser, the potential to recoup $341million in tax breaks, adding further insult to injury for taxpayers," Stearns said in a statement. "Solyndra's investors could walk away with hundreds of millions of dollars in tax breaks even after the solar company's bankruptcy cost taxpayers over half a billion dollars."
Stearns adds that a lawyer for the IRS has said that the agency may appeal the plan.
Yet another government policy failure, but this one lines the pockets of "the rich". Ironic.