Solyndra announces Nov. 7 effective date for plan of reorganization

By Jim Witters

Wilmington, Del., Nov. 8 - Solyndra LLC and 360 Degree Solar Holdings, Inc. announced that the effective date for their plan of reorganization is Nov. 7, according to documents filed with the U.S. Bankruptcy Court for the District of Delaware.

The reorganization plan was confirmed by the court on Oct. 22.

In confirming the plan, judge Mary F. Walrath overruled objections from the Internal Revenue Service, the U.S. Department of Energy and the U.S. Trustee.

The IRS filed a notice of appeal, claiming that the bankruptcy proceeding was merely an attempt by Solyndra's senior creditors to avoid paying taxes on about $1 billion in net operating losses and other tax benefits.

Plan details

Under the plan, the 360 Degree holding company will be reorganized and the plan sponsors - Argonaut Ventures I, LLC and Madrone Partners, LP - 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.

Argonaut and Madrone 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.

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

Solyndra LLC will be dissolved upon the reorganized holding company's emergence from bankruptcy.

Creditor treatment

Treatment of creditors under the confirmed amended joint plan includes:

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

• Holders of miscellaneous secured claims will be paid in full, 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.

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 under Chapter 11 case number 11-12799.

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