Submitted by: Submitted by shanecolyer82
Views: 10
Words: 1598
Pages: 7
Category: Business and Industry
Date Submitted: 02/26/2016 06:30 PM
Solyndra solar company was a start-up manufacturer of cylindrical solar panels based in Fremont, California. Solyndra provided low-cost solar panels that were easy to mount since, unlike the traditional solar panels, Solyndra panels did not require concrete stands (Goulding, 2011). This is why the government earmarked Solyndra to receive federal loan guarantee from the department of energy as a way of encouraging development of clean energy. However, although Solyndra was believed to be the face of future clean energy, it filed for bankruptcy in September 2011, ceased all business activities and laid-off its approximately 1,100 workers. This presented legal and ethical problems when it filed for chapter 11 bankruptcy protection despite getting a federal loan of $535 million from the department of energy. In addition, Solyndra also received a $25.1 million tax break from the California Alternative Energy and Advanced Transport Authority (CAEATA) to finance the construction of a state of the art solar panel plant (McNeil, 2013). Solyndra managers did not inform the authorities that the company was in fact losing a lot of money and sales were dwindling day-to-day. Eventually the liquidity crisis reached an unsustainable level and managers filed for the bankruptcy. Following the collapse an investigation was launched to unearth what was behind Solyndra’s poor performance and eventual filling for protection under bankruptcy 11 provisions. The investigation disclosed that Solyndra management gave faulty information about their operations, financial reports and viability of their prospective projects. Even more troubling it was revealed that Solyndra loan guarantee was hurriedly approved due to White House influence despite the warning from staff in the Office of Management and Budget (Weiner, 2012). However, the department of energy knowingly ignored these warnings and approved the loan. Loss of taxpayers’ money was attributed to White House influence since it...