Shutdown and Investigation
On 31 August 2011, Solyndra announced it was filing for Chapter 11 bankruptcy protection, laying off 1,100 employees, and shutting down all operations and manufacturing. In Solyndra's quarterly employee meetings, employees were told that the company was losing money, and that production costs, while declining, were still higher than the also-declining market prices for solar panels. The decision to lay off employees and cease operations came about as the result of a board meeting on 30 August in which terms for the injection of additional capital could not be agreed upon. This left Solyndra with virtually no cash.
On 8 September 2011, Solyndra was raided by the FBI investigating the company.
In September 2011, federal agents visited the homes of Brian Harrison, the company's CEO, and Chris Gronet, the company's founder, to examine computer files and documents. Also, in September 2011, the US Department of the Treasury launched an investigation.
On 29 September 2011, a US Department of the Treasury official confirmed that the criminal probe of Solyndra is focused on whether the company and its officers misrepresented the firm’s finances to the government in seeking the loan or engaged in accounting fraud.
On 7 October 2011, newly revealed emails showed that the Obama administration had concerns about the legality of the Department of Energy's loan restructuring plan and warned OMB director Jeffrey D. Zients that the plan should be cleared with the Department of Justice first, which the Department of Energy had not done. The emails also revealed that as early as August 2009, an aide to then-White House Chief of Staff Rahm Emanuel had asked a Department of Energy official if he could discuss any concerns among the investment community about Solyndra but that the official dismissed the idea that Solyndra had financial problems.
On 13 October 2011, the bankruptcy court approved the hiring of the chief restructuring officer Todd Neilson.
On 20 October 2011, Rocket Renewables (rocketrenewables.com) incorporated in Delaware with Gronet as the President and CEO.
On 10 October 2012, the US Department of Justice objected to the bankruptcy plan amidst allegations that "the plan's primary purpose is tax avoidance through the preservation of hundreds of millions of dollars of net operating losses after reorganization". Also, the successor company is named 360 Degree Solar Holdings, Inc., which would have control over "approximately US$ 350 million in tax attributes", such as NOL carryovers.
On 22 October 2012, in the case In re Solyndra LLC et al., No. 11-12799 (Bankr. D. Del.), Judge Mary F. Walrath of the U.S. Bankruptcy Court for the District of Delaware ruled "that the evidence does not support a finding that the principal purpose of the plan was tax avoidance." "Solyndra's owners, Argonaut Ventures I LLC and Madrone Partners LP" will "realize the tax benefits of between $ 875 million and $ 975 million of net operating losses, while more senior creditors, including the Department of Energy, which provided a $ 535 million loan guarantee to Solyndra, will receive nearly nothing."
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