Congressional report preview: Solyndra was too green to fail… at least until investors took priority over taxpayers for repayment
**Written by Doug Powers
The House energy committee is expected to release a report on Solyndra sometime this week, but parts of it have already gotten out. Last year, a White House budget analyst warned that temporarily saving Solyndra via a loan restructure could ultimately cost taxpayers more if the company later went under than if the government just cut its losses, allowed it to fail, and immediately liquidated the assets.
The Washington Post takes it from there:
Even so, senior officials in the White House’s Office of Management and Budget did not discourage the Energy Department from proceeding with its plan to restructure a federal loan to Solyndra — a move that put private investors ahead of taxpayers for repayment if the company closed, the investigation by Republicans on the House Energy and Commerce Committee found.
The restructuring went forward, but within months Solyndra failed anyway, leaving federal taxpayers on the hook for much of the half-billion-dollar federal loan. Now, a year after the company’s collapse, debate continues over whether the refinancing plan was legal or a wise investment. Last week, Solyndra’s final liquidation plan estimated that the government will recover just $24 million of the $527 million that taxpayers lent to the company.
The House energy committee is expected to release the results of its 18-month investigation into Solyndra this week. Its report, parts of which were obtained by The Washington Post, suggests that then-OMB Director Jack Lew let the refinancing move forward without intervening, even though some OMB analysts thought a refinancing plan that favored private investors might violate the law. Lew is now White House chief of staff.
The rest of the story here.
Last week, Solyndra filed its Chapter 11 reorganization plan:
The plan, filed Friday in U.S. Bankruptcy Court in Wilmington, Del., provides for holders of allowed administrative expenses and priority claims to be paid in full, and assets of Solyndra will be vested in the Solyndra Residual Trust. Holders of Solyndra’s general unsecured claims, valued at $50 million to $120 million, are expected to recover from 2.5 percent to 6 percent, according to a disclosure statement filed with the plan.
The plan’s sponsors are identified as Argonaut Ventures I LLC and Madrone Partners LP. Argonaut Ventures is the investment arm of billionaire George Kaiser’s charitable organization.
**Written by Doug Powers
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