The story will come back to the front pages on 9/14. That is the date that has been set for the House Energy and Commerce hearing that will look into S and the DOE connection. It can be safely assumed that some tough questions will be asked, I think they will be adroitly ducked. The cast of characters:
Of interest to me is that there are no witnesses scheduled for the principal owner, Argonaut Ventures (George Kaiser family investment vehicle). One would think that it might be informative to talk with the investors. Ah, well.
.
The DIP document (BK loan) has been filed with the court. No surprises. Argonaut will provide the dough. This is a $4mm loan. The terms are very clear. This money is only available to facilitate a very rapid 363 sale. (Standard BK process).
If the Judge says, “Yes” to the DIP (he has to have a reason why not to) S will go up for sale. It won’t take long once the process starts.
This raises the question of, “What’s S worth?” I admit that I don’t have a clue.
Inventory and accounts receivable were sold in July (To, guess who? Argonaut of course!). The company has facilities in two locations. They have a product, but they haven’t figured out how to make money at it. That can’t be worth a hell of a lot.
The one asset they might have is a Net Operating Loss. A big one at that; at least $500mm. This is tricky stuff. NOLs are subject to IRS rules (#382-Look it up if you want to get dizzy), so I asked a BK Attorney who has been assisting me for some color:
Using post bk NOLs to shelter profits from existing businesses is one of those things that is hard to pin down an answer to. Technically, you aren't supposed to be able to - IRS frowns on it. But good attorneys make 1000 an hour for a reason.
Zell has spoken quite openly about targeting bankrupt companies only for their NOLs, to shelter profits from solid companies already in his stable. There has to be a defensible continuity of business, but solar is energy, so there would be continuity in pairing it with an existing energy firm. BUT - to take advantage of 382, the sale in bk would have to be structured very carefully - so the thing to watch for is the deal being set up that way. You don't get the NOLs if you buy the assets -you only get a chance to keep them if you buy the company, and meet the pre and post ownership thresholds.
Bottom line. Only Argonaut has a chance of utilizing the tax benefits. Whether they are ultimately worth anything is not clear. But this fact does give Argonaut a potential leg up on other bidders. Keep in mind that Argonaut would not be paying cash for anything. They would just swap all of S (including the NOLs) for their otherwise worthless IOUs.
On a personal note, my connection to this got me on Tulsa Ok. radio station KFAQ the other day. Tulsa is also the home of George Kaiser. The host, Pat Campbell, said that he had reason to believe that Kaiser’s “people” would listen in. At one point it came up that Kaiser is a pillar of Tulsa. I used that chance to say: (Edited for stutters, run ons etc…(Link)
George Kaiser could step up in a bankruptcy court and offer to put $300mm into S. The proceeds would be used to substantially pay down the government IOU. The balance of the debt would be converted into common stock. If S were around in 5-7 years, the government might get the rest of its money back.
That's my challenge to George Kaiser. Step up and fix this problem.
Of course this would be the dumbest thing for Kaiser to do. I don’t think he’s dumb at all (and he has the best lawyers). I’m sure he doesn’t like losing good money after bad. That said, this isn’t one of those everyday stories. This one could swing an election. I wonder if he gave it a thought.
.
Didn't they have Teamsters building the panels. This scam was never going to succeed.
Or they "chucked" the panels to be sold on the black market and defaulted on the loans anyway.
I don't know the particulars here but a 30% rejection rate is not uncommon with a new product/process/equipment/workforce.
I my years at Boeing we had startup manufacturing rejection rates in the 90% range.
Sometimes you just have to learn what not to do.
Nobody is quesitoning the rejection rate - just the process how they get $500M [OF OUR F'ING MONEY], and now, why, it's all forgiven - except WE have to pick up the tab and not ask a GD question - or else.
DOE money. That's the bottom line. If the IRS gets the money how does that help the DOE and their project (going on 20 plus years is it?) of keeping nuclear material...in the right place.
Someone needs to grab a cat 'o nine tails and whip that little Steven Chu's ass up before a Senate subcommittee to find out just what the hell he's been doing with all our money.
Oh, yeah...and when is there going to be a Lugar Building...and a Lugar Interstate...and a town of Lugar...and City of Lugar. And a Lugar towers...and a Lugar...........
Sorry, I was getting back into engineers mode there. I completely agree about getting our f-ing money back, from this and most of that godforsaken black hole known as Barry's stimulus program.
The biggest defect impacting business in America today is our busted interpretation of capitalism.
If they would just leave things in the hands of markets, this shit would be aired out in a month. And we'd have about 20% fewer names among the listings of the Dow. That's winning.
Technically the dow will always be comprised of 30 companies :P
Thanks Bruce for staying with this. Smells like a barnyard to me.
Hmmm,... I wonder if there were any meetings that included a group, that conspired to defraud all the creditors and investors. That would qualify as a RICO violation. It's a sweet way to get all the rats out on the table.
You are putting the cart before the horse. Proving RICO at this juncture is like proving water is wet.
Every District Attorney in this country would have to be tarred & feathered first. You still need prosecutors in order to prosecute. Order. We are well past the Law part of Law & Order.
There are RICO violations, and then there are RICO prosecutions... Eric Holder is Atty General ... What do you think will happen?
clearly Solyndra failed because of gun owning racists.
You forgot bitter. And they not only own guns, they cling to them.
...while clinging to their religion......
Takbir!
Now you've done it ;-)