Two private equity firms, who own Solyndra, the failed solar firm that got billions in federal loan guarantees, may benefit from the companies collapse in the form of tax breaks.
Two equity firms Argonaut Ventures and Madron Partners could potentially end up with close to $500 million in tax breaks for their investment in the failed company. And lawyers for the federal government want to get a better look at their bankruptcy plan.
Solundra received $528 million in federal loans from the Department of Energy, money that will likely never be recovered, leaving the American taxpayer on the hook.
The Department of Energy and the Internal Revenue Service asked the bankruptcy court to reject the Solyndra’s disclosure statement which outlines the company’s plan to repay creditors unless they provide more details on the tax benefits they will receive.
Under the current bankruptcy plan, Argonaut and Madrone can potentially take tax breaks for “net operating losses.” In 2011, the two firms agreed to give Solyndra a $75 million loan to keep them afloat during the restructuring process with the contention that they would be paid back before the federal government.
In the filing both agencies said, “Argonaut and Madrone could potentially use Solyndra’s net operating losses to avoid hundreds of dollars in future income taxes that they would owe in income generated by business ventures wholly unrelated to the debtors.”
A bankruptcy attorney representing Solyndra said they would file a response to the government’s request.
Solyndra filed for bankruptcy last year amid controversy, wherein Conservative lawmakers asserted the loan guarantees were awarded to President Obama’s cronies. However, after a Senate investigation the loans were found to be “merit-based.”