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Thursday, November 1, 2012
Solyndra Judge’s Approval of Bankruptcy Plan Appealed
By Karen Gullo - Nov 1, 2012 8:38 PM ET
The U.S. Internal Revenue Service appealed a bankruptcy judge’s decision to approve Solyndra LLC’s plan to exit court protection.
The agency notified U.S. Bankruptcy Judge Mary Walrath in Wilmington, Delaware, of the appeal in a court filing today. Walrath approved the plan over government objections last month.
Under the plan, Solyndra, the failed solar-panel maker that received a $535 million U.S. Energy Department loan guarantee before going bankrupt, will be liquidated. Its parent, 360 Degree Solar Holdings Inc., will exit court protection with so- called net operating loss carryforwards of as much as $975 million, which it may use against future income, according to court papers. The potential tax breaks may be as much as $341 million.
The IRS objected, arguing the plan couldn’t be approved because its principal purpose was to allow 360 Degree investors Argonaut Ventures I LLC and Madrone Partners LP to avoid taxes.
Walrath rejected the IRS’s challenge, saying at an Oct. 22 hearing that tax avoidance “has to be the primary, most important part of the plan, and I just don’t see that here.”
The case is In re Solyndra LLC, 11-12799, U.S. Bankruptcy Court, District of Delaware (Wilmington). . . .