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Broke Solyndra owes Schott $7.7 million

06 Sep 2011

Full list of creditors includes a host of well-known optical component and laser companies, as a staff lawsuit is launched against the PV firm.

Optical component and specialty glass manufacturer Schott North America is owed $7.7 million as a trade creditor of Solyndra, the CIGS solar systems company that has filed for Chapter 11 bankruptcy protection.

Schott appears on a list of more than 200 creditors and lenders to the company, as detailed in part of the Chapter 11 bankruptcy filing made by Solyndra and its affiliate 360 Degree Solar Holdings to the US Bankruptcy Court in Delaware, dated September 5. Total assets and liabilities were estimated at between $500 million and $1 billion in the filing.

Schott appears to be the trade creditor owed the most by Solyndra. The company, which supplies glass for photovoltaic applications through its Schott Solar subsidiary, is ranked first on a list of major creditors, just above MGS Manufacturing Group, which is owed $7.5 million.

The same list includes 18 organizations that sank a combined $40 million into Solyndra to provide the company with its “Tranche E” credit facility – including the Howard Hughes Medical Institute ($4.8 million), Greece’s Beltest Shipping Company ($4.4 million), the Masdar Clean Tech Fund ($4.2 million) and Australia-based AMP Private Equity ($2.7 million). Meanwhile, utility company Pacific Gas & Electric is owed $1.9 million.

But the full list of creditors also features many of the best-known names in the optics world, including Rofin-Sinar, Coherent, Edmund Optics, Newport Corporation, CVI Laser, Ocean Optics, Linos Photonics and Jenoptik Laser Technology. Others include the laser safety equipment firms Laservision and NoIR Laser, the microscope specialist Nyoptics, and the optical metrology firm Strainoptics.

One of the many court documents now filed by Solyndra shows that the company terminated 900 full-time employees on August 31, as well as 200 temporary staff, when management decided to discontinue manufacturing operations and evaluate restructuring options, including a possible sale of the business.

Skeleton crew
As a result, Solyndra is now operating with a skeleton crew of 113, mostly at the company’s headquarters in Fremont, California. The 1100 terminated employees received their last bi-weekly payroll on September 2, and the drastic reduction in staff numbers will cut the firm’s gross payroll cost from $3.5 million to approximately $650,000.

Aside from the claims of its myriad creditors, Solyndra may also face a class-action lawsuit led by one of its former employees, an R&D engineer, who says that the company acted unlawfully in carrying out the mass layoffs without a 60-day advanced written notice, in violation of two labor codes.

However, Solyndra is understood to be claiming exemption from the federal Worker Adjustment and Retraining Notification (WARN) Act on the basis that it was attempting to arrange financing to keep the company afloat right up until the moment that it announced the factory closure.

In another of its filings to the bankruptcy court, Solyndra said that it was now seeking an emergency $4 million “Debtor in Possession” (DIP) loan from an entity to be set up by Argonaut Ventures and Madrone Partners – two of the company’s major investors, with a combined equity of more than 20% in the affiliate 360 Degree Solar Holdings.

Argonaut Ventures is understood to be an affiliate of Argonaut Private Equity, which led a $198 million financing round in Solyndra in September 2009. That financing round, in conjunction with the controversial $535 million loan guarantee awarded by the US Department of Energy (DOE), is what enabled Solyndra to build its 500 MW capacity “Fab 2” CIGS facility.

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