The department said the government could not assure the fair treatment of the company’s creditors, including the Department of Energy, which granted Solyndra $528 million in loans, unless it had unimpeded access to the company’s financial records, which the executives are so far refusing to share.
The government’s filing said the executives — Brian Harrison, the chief executive; W. G. Stover, the chief financial officer; and Benjamin Schwartz, in-house counsel — were within their rights in refusing to talk about the company’s financial condition because of a pending federal investigation and potential lawsuits. The government is not accusing them of any specific wrongdoing at this time, but is seeking the appointment of a trustee to help untangle the company’s complex financial condition, the court filing said.
A company spokesman did not respond to requests for comment.
Separately, in Washington, an Energy Department official confirmed that Secretary Steven Chu personally approved a loan restructuring for Solyndra late last fall as the company’s financial problems were mounting.
Mr. Chu, who had announced the original Solyndra loan 18 months earlier with great fanfare, signed off on the loan restructuring, officials said, in hopes of staving off the company’s collapse. Solyndra declared bankruptcy in September, costing 1,100 workers their jobs and putting in jeopardy the public money that was a central pillar of its financing.
At the time of the restructuring, Solyndra had already drawn down some $460 million of its loan commitment, and Mr. Chu decided that the chance of recouping its investment would be improved by a relatively small infusion of new cash, officials said.
Republicans in Congress who are investigating Solyndra’s demise and the $38 billion Energy Department loan guarantee program are demanding to know why Mr. Chu, a Nobel Prize laureate in physics, continued to support Solyndra despite signals that it was floundering.
Representative Cliff Stearns, a Florida Republican who is leading one of two House investigations, said in a statement, “Secretary Chu and the leadership at D.O.E. ignored every warning sign pointing to Solyndra’s failure and stubbornly continued to commit taxpayer money to a doomed venture that left the American people holding the bag at a cost of $535 million.”
Mr. Stearns continued, “Chu admits that he approved the loan restructuring agreement, bringing up the question — why did he allow private investors to be placed ahead of taxpayers in recovering any funds if Solyndra failed, which is a clear violation of the Energy Policy Act and the provision on subordination?”
Damien LaVera, an Energy Department spokesman, said it was not unusual that Dr. Chu would sign off on a major loan restructuring decision.
“When the career loan program staff recommends a transaction for conditional commitment, closing or restructuring, the secretary must give final approval,” Mr. LaVera said in an e-mail, “but only after extensive and rigorous analysis by teams of career federal employees and outside experts of the risks and benefits.”
Mr. LaVera said the choice was between letting the company fail or giving it a chance to survive in a competitive global market.
Jay Carney, the White House press secretary, said on Friday afternoon that Dr. Chu had the president’s “full confidence.”
Even as controversy engulfed the Solyndra loan, the Energy Department on Friday approved more than $4.7 billion in loan guarantees for other solar energy projects as the authority for the program expired. Among the projects were a $1.46 billion loan guarantee for a 550-megawatt photovoltaic array in Riverside County, Calif.; a $646 million loan for a 230-megawatt solar plant in Los Angeles County; and a $1.4 billion guarantee to install solar panels on 750 rooftops in 28 states and the District of Columbia.
Article source: http://feeds.nytimes.com/click.phdo?i=90a58584a75a42fdd61b08116f056473
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