IRS Recognizes Solyndra Deal Was Rotten from the Outset and Seeks Rejection of Solyndra Bankruptcy Plan
Investors with Close Ties to the President, Including Billionaire George Kaiser, Sought “Tax Avoidance” and Left Taxpayers Holding the Bag for Half a Billion Dollars
The Internal Revenue Service filed court documents yesterday objecting to Solyndra’s bankruptcy reorganization plan, concluding the company’s private investors set it up to claim lucrative tax breaks in the event the company went belly up. IRS attorneys found, “The undeniable conclusion is that tax benefits drive this plan.”
The court documents revealed Solyndra’s investors had set up a shell corporation to avoid paying taxes eight months before the company went bankrupt. The Washington Times reports, “Even as company officials negotiated a restructuring deal with the Energy Department to keep Solyndra afloat, the company's owners were ‘intently focused’ on how to preserve their ability to use net operating losses as they privately prepared for the possibility that Solyndra would go broke, according to the government attorneys.” The company’s reorganization plan was set up to provide as much as $350 million in tax breaks to investors including top Obama supporter and billionaire George Kaiser. The court documents cite a 2010 email from Kaiser in which he writes, “I would go a long way to preserve the NOLs."
Upon learning of the IRS filing, Energy Commerce Committee Chairman Fred Upton (R-MI) and Oversight and Investigations Subcommittee Chairman Cliff Stearns (R-FL) commented, “It did not take long for the IRS in bankruptcy court to recognize that Solyndra was a rotten deal for the taxpayers from the beginning. In Solyndra’s bankruptcy, the Obama administration’s picking of winners and losers has reached shameful new lows with the president’s backers, including billionaire George Kaiser, in line to get hundreds of millions in tax breaks while taxpayers stand to lose over half a billion dollars.”
IRS says ‘tax avoidance’ at heart of Solyndra bankruptcy plan
The Washington Times
October 11, 2012
The Internal Revenue Service urged a bankruptcy judge to reject solar panel maker Solyndra LLC's bankruptcy plan Wednesday, saying it amounts to little more than an avenue for owners of an empty corporate shell to avoid paying taxes.
"The undeniable conclusion is that tax benefits drive this plan," attorneys for the IRS wrote in a bankruptcy pleading.
Arguing that the bankruptcy court ought not confirm a plan "whose principal purpose is tax avoidance," attorneys said in filings in U.S. Bankruptcy Court in Delaware that the tax breaks would be worth more money than funds set aside for creditors.
Taxpayers are on the hook for more than a half-billion dollars after the company filed for bankruptcy last year, just two years after winning a loan guarantee from the Department of Energy.
What's more, government attorneys said that as far back as 2010, Solyndra owners had "planned meticulously" to be able to use Solyndra's net operating losses to offset future tax liabilities.
"The only reason for the shell corporation to exist post-confirmation is to enable its owners to exploit these tax attributes, which would be lost in liquidation," the IRS argued in court papers.
Read the entire article online HERE.
Solyndra investor sought tax breaks as bankruptcy loomed-filing
October 10, 2012
Eight months before solar panel maker Solyndra filed for bankruptcy, the company's politically connected backer sought to hold on to lucrative tax breaks in the event the company went out of business, according to court documents.
The new information was revealed on Wednesday by the U.S. Internal Revenue Service, which filed an official objection to Solyndra's bankruptcy reorganization plan. …
Solyndra filed for Chapter 11 protection from creditors on Sept. 6, 2011, as it and other solar panel companies were hurt by a flood of cheap imports from China that drove down prices.
The company has auctioned virtually everything from inventory, office equipment and real estate to repay its debts, but may prove unable to pay any of its unsecured creditors.
Solyndra's bankruptcy plan could prove a further embarrassment to the administration if it is seen rewarding risk-driven venture capitalists ahead of unsecured creditors such as suppliers and laid-off staff.
In its court filing on Wednesday, the IRS opposed Solyndra's plan. If approved by creditors, a holding company would emerge from bankruptcy with no employees or business operations - but as much as $350 million in tax breaks that could be used by Solyndra's investors, including Argonaut Ventures.
Read the entire article online HERE.