Just wondering how much did Solyndra and other companies like it have an affect on the job growth reports given by the government?
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No jobs, but the execs got huge bonuses.
Bankrupt Solyndra seeking to pay bonuses - Washington Times
Backed by $535 million in federal loan guarantees but burning through the little cash it had left, Solyndra made its first sale in late July to a corporate entity that had been formed just a day earlier. Three more transactions followed over the next few weeks with the same buyer, Solyndra Solar II. By the time the last sale took place on Aug. 29 two days before the company announced plans to file for bankruptcy Solyndra had sold off a total of $58.1 million worth of inventory for $17.5 million, according to documents Solyndra attorneys filed last month in U.S. Bankruptcy Court in Delaware. The sales began at a time when Solyndra officials were trying hard to assure lawmakers and the public of the companys prospects amid increasing questions about the companys financial health. Inside the company, the sales transactions show, officials were moving fast to raise cash and buy Solyndra more time.
Todd Zywicki, bankruptcy professor at the George Mason University School of Law, said its not unusual for troubled companies to sell off assets to improve liquidity. But he said the inventory sales figure cited by Solyndra $58.1 million in inventory for $17.5 million in cash seems unusual. The test under the bankruptcy code is whether the sale was for reasonably equivalent value and selling inventory at such a huge discount raises real concerns, he said. If Solyndra Solar II is owned or controlled by any insiders or anything like that, then it becomes even more suspicious. Solyndra Solar II was formed in Delaware by affiliates of Solyndras debtor in possession lender investors Argonaut Private Equity and Madrone Capital Partners as well as other debt holders, bankruptcy and government records show. Another special-purpose entity, Solyndra Solar LLC, was formed to purchase the companys accounts receivable. Argonaut is the investment arm of a foundation headed by billionaire Oklahoma businessman George Kaiser. Madrone Partners has ties to Wal-Marts Walton family.
Steve Mitchell, an Argonaut executive who served on Solyndras board, said in a telephone interview Tuesday that investors did not profit from overall sales of the accounts receivable and inventory. The plan was to give the company more time to turn around, he said. The inventory was purchased to give the company more time to turn the corner as Solyndras revenues were ramping and its costs were coming down, unfortunately the macro solar and economic environment at the time proved too difficult, Mr. Mitchell said. The $58.12 million reported by Solyndra in its bankruptcy filing is the cost to produce the inventory purchased, with the DOEs consent, by Solyndra Solar II, he said, referring to the Energy Department, which awarded Solyndras loan guarantees in 2009. Solyndras expected sales proceeds for this inventory was $35 million, he said. In the event Solyndra sold these solar panels at the expected price, Solyndra would recover 91 percent of the total sales proceeds.
To sell the inventory, Solyndra formed its own special entity called Solyndra Financing LLC, which, in addition to inventory, also sold off tens of millions of dollars in the companys accounts receivable to a separate entity called Solyndra Solar LLC. Both Solyndra Solar and Solyndra Solar II were created to raise additional capital and improve debtors liquidity position in the months before the company went bankrupt, attorneys said in filings.
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