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Solyndra Asks Judge To Approve Reorganization Plan Over Gov’t Objections

WILMINGTON, Del. (CBS/AP) — The failed solar power company Solyndra LLC is asking a Delaware bankruptcy judge to confirm its proposed reorganization plan over objections from government attorneys.

Solyndra lawyers said Monday in court documents that the plan meets legal requirements for confirmation. Lawyers also addressed and rejected Internal Revenue Service and Department of Energy objections.

The IRS had previously said in court documents that the plan’s principal purpose is tax avoidance. The Department of Energy, which loaned Solyndra $528 million, claimed the plan fails to protect DOE’s $30 million interest in pre-bankruptcy collateral.

The plan allows for two private equity funds that control Solyndra to potentially reap hundreds of millions of dollars in tax breaks after Solyndra emerges from bankruptcy, using net operating losses.

The hearing on the plan is set for Wednesday.

(Copyright 2012 by CBS San Francisco. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.)

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