Solyndra wins court approval for amended disclosure statement

By Jim Witters

Wilmington, Del., Sept. 7 - Solyndra LLC and 360 Degree Solar Holdings, Inc.'s disclosure statement for its amended plan of reorganization was approved Sept. 7 during a hearing in the U.S. Bankruptcy Court for the District of Delaware.

Debtors attorney Maxim B. Litvak said a few changes were made to the document before the hearing to resolve objections from the U.S. government and the U.S. Trustee.

In addition, Solyndra revealed during the hearing that it holds about $11 million in general business tax credits through 2010 and expects the total to climb to $12 million through fiscal 2011.

Those tax credits will be retained by Solyndra Holding LLC, which is the reorganized company that will emerge from Chapter 11, Litvak said.

The debtors also said Solyndra LLC will be dissolved after the final decree closing the case. Previously, the company was to be dissolved on the plan effective date.

Plan details

As previously reported, the proposed plan incorporates multiple settlements among the Solyndra debtors, some pre-bankruptcy lenders, WARN Act plaintiffs, some creditors and interest holders and the company's official committee of unsecured creditors.

As a result of these settlements, there will be distributions to holders of general unsecured and priority claims.

Under the plan, the 360 Degree holding company will be reorganized, and the plan sponsors will provide a $3.5 million holdings settlement fund.

The assets of Solyndra, except trust avoidance claims, which will vest in a Solyndra settlement trust, will be vested in a Solyndra residual trust and liquidated for the benefit of creditors.

The plan sponsors - Argonaut Ventures I, LLC and Madrone Partners, LP - will provide exit financing and a Solyndra settlement fund loan, the proceeds of which will be contributed to the Solyndra settlement trust to benefit holders of Solyndra general unsecured claims who agree to forego any claims against the 360 Degree holding company.

Litvak said the plan calls for a 3% recovery to creditors of Solyndra LLC and to 360 Degree Solar Holdings.

Creditor treatment

Treatment of creditors under the proposed amended joint plan includes the following:

• Administrative claims and priority non-tax claims will be paid in full in cash;

• Holders of miscellaneous secured claims will either be paid in full or receive the collateral securing the claim, or the right to the claim will remain unaltered;

• After payment of the tranche I exit facility and Solyndra settlement fund loan, holders of pre-bankruptcy tranche A claims will receive a share of Solyndra net lender distributable assets and, after payment of the tranche II exit facility, a share of Solyndra residual trust interests;

• After payment of the tranche A claims, each holder of a pre-bankruptcy tranche B claim will receive a share of the Solyndra net lender distributable assets and, after payment of the tranche II exit facility, a share of the Solyndra residual trust interests that were distributed or made available to the holders of pre-bankruptcy tranche A claims;

• After payment of the pre-bankruptcy tranche A and tranche B claims, each holder of a pre-bankruptcy tranche D claim and pre-bankruptcy tranche E claim will receive a share of the Solyndra net lender distributable assets and, after payment of the tranche II exit facility, a share of the Solyndra residual trust interests that were distributed or made available to holders of pre-bankruptcy tranche B claims;

• Holders of general unsecured claims against the holding company will receive a share of the holding company settlement fund and, after payment of the tranche II exit facility, a share of any proceeds of retained rights of action of the reorganized holding company up to the full allowed amount of the claim;

• Holders of general unsecured claims against Solyndra will receive a share of the Solyndra settlement trust interests, which entitles them to a share of the Solyndra settlement fund, a share of Solyndra residual trust interests after payment of the tranche II exit facility and a share of the proceeds from any residual net lender distributable claims assets after all pre-bankruptcy lender claims have been paid in full;

• The rights of holding company interest holders will be left unaltered; and

• Holders of Solyndra interests will receive no distribution.

The plan confirmation hearing is scheduled for Oct. 17.

Solyndra is a Fremont, Calif.-based manufacturer of cylindrical solar photovoltaic systems for large industrial and commercial rooftops. The company filed for bankruptcy on Sept. 6, 2011. Its Chapter 11 case number is 11-12799.

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