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Oct 10 (Reuters) - Eight months before solar panel maker Solyndra filed for bankruptcy, the company's politically connected backer sought to hold on to lucrative tax breaks in the event the company went out of business, according to court documents.
The new information was revealed on Wednesday by the U.S. Internal Revenue Service, which filed an official objection to Solyndra's bankruptcy reorganization plan.
The failure of Solyndra, the company President Obama held up as an example of government backing for renewable energy jobs, is a political weapon for Republicans ahead of the November elections as they highlight energy policies more favorable to fossil fuels.
Solyndra filed for Chapter 11 protection from creditors on Sept. 6, 2011, as it and other solar panel companies were hurt by a flood of cheap imports from China that drove down prices.
The company has auctioned virtually everything from inventory, office equipment and real estate to repay its debts, but may prove unable to pay any of its unsecured creditors.
Solyndra's bankruptcy plan could prove a further embarrassment to the administration if it is seen rewarding risk-driven venture capitalists ahead of unsecured creditors such as suppliers and laid-off staff.
In its court filing on Wednesday, the IRS opposed Solyndra's plan. If approved by creditors, a holding company would emerge from bankruptcy with no employees or business operations - but as much as $350 million in tax breaks that could be used by Solyndra's investors, including Argonaut Ventures.
Argonaut is the investment arm of a foundation tied to the Democratic fundraiser, Oklahoma billionaire George Kaiser. Most of the tax breaks would come in the form of Net Operating Losses (NOLs) which could be used to offset future taxable income.
Meanwhile, under the bankruptcy plan Solyndra's creditors would receive pennies on the dollar, the IRS said, adding that the principal purpose of the plan is "tax avoidance."
A Solyndra spokeswoman said the company would file responsive papers but otherwise declined to comment.
The company filed for bankruptcy in September 2011, but its investors feared a potential liquidation as early as December 2010 if it could not convince the Department of Energy to release additional loans for the company, according to the IRS filing.
The IRS cited emails from Kaiser to one of the venture firm's managing directors.
"I would go a long way to preserve the NOLs," Kaiser wrote in December 2010.
As Argonaut, Solyndra and its tax professionals worked to determine the amount of tax breaks available to Solyndra, the company's chief financial officer was advised to delay a particular transaction which would have reduced the available NOLs by $100 million, the court filing said.
A representative for Kaiser could not immediately be reached.
Solyndra has said in recent court filings it may not be able to repay any of the $528 million that the U.S. government had lent in 2009 to promote clean energy businesses.
Republicans have seized on Solyndra's failure to accuse the White House of rushing the $528 million loan in part to help the venture capital backers. The Obama administration has said the loan was based on the merits of Solyndra's business prospects.
The case in U.S. Bankruptcy Court, District of Delaware is In re: Solyndra LLC et al., 11-12799. (Reporting by Tom Hals in Wilmington, Delaware and Dan Levine in San Francisco; Additional reporting by Nichola Groom in Los Angeles; Editing by Richard Chang)