Solyndra eyes fallback plan to sell machinery

WILMINGTON, Delaware Tue Nov 22, 2011 5:27pm EST

A sign at the entrance to the headquarters of bankrupt Solyndra LLC is shown in Fremont, California September 20, 2011.  REUTERS/Robert Galbraith

A sign at the entrance to the headquarters of bankrupt Solyndra LLC is shown in Fremont, California September 20, 2011.

Credit: Reuters/Robert Galbraith

WILMINGTON, Delaware (Reuters) - Solyndra LLC, the bankrupt solar panel maker that owes $500 million to the U.S. government, plans to auction off its machinery in January if it does not get bids for the entire business by an extended deadline.

Solyndra said last week that an initial deadline passed without any satisfactory bids to buy the entire company and restart production, damping hopes that some of its 1,000 idled workers might be rehired.

The company's advisers have focused on selling the business as a whole as the best way to generate money to repay creditors.

Solyndra filed for bankruptcy in September as panel prices have plummeted due to a glut of supply. The company had a $535 million loan that was guaranteed by the Department of Energy.

The company's failure has been an embarrassment for the White House after President Barack Obama visited the company last year. His administration has promoted clean energy as one way to create jobs.

Solyndra will file a motion as soon as Tuesday evening for permission to sell its equipment at an auction in mid-January, Debra Grassgreen, the company's attorney, told a bankruptcy court hearing.

If a buyer for the entire business emerges, then the machinery auction would be unnecessary, Grassgreen said.

Solyndra's advisers still hold out hope they may strike a deal to sell the business as a going concern. Todd Neilson, Solyndra's chief restructuring officer, said after the hearing that Solyndra did receive bids for the business, but said he would not describe them as serious bids.

Solyndra's headquarters were raided by the Federal Bureau of Investigation shortly after it filed for bankruptcy, and Congress is investigating if political connections played a role in approving the loan guarantee.

Neilson said he sensed that potential bidders were being driven away by politics as well as the depressed market for solar businesses.

The case is In re Solyndra LLC, U.S. Bankruptcy Court, District of Delaware, No. 11-12799

(Reporting by Tom Hals; Editing by Gary Hill)

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