SOLYNDRA INVESTORS SEEKING WINDFALL RETURN OF $975 MILLION IN NET OPERATING LOSS

WASHINGTON, OCT. 11, 2012 – Rep. Cliff Stearns (R-FL), Chairman of the House Energy and Commerce Committee’s Subcommittee on Oversight and Investigations, expresses concern with a plan submitted by Solyndra’s hedge fund investors to the bankruptcy judge seeking to use net operating loses to cut their federal income tax bill by up to $350 million.  “I urge the U.S. Bankruptcy Court to reject this write-off plan because it merely creates an avenue for two hedge funds to avoid paying taxes on their other profitable businesses at taxpayer expense," said Stearns.

Due to the Obama Administration’s rush to close the loan guarantee to Solyndra, the taxpayers are out over $500 million in this risky scheme.  Solyndra filed for bankruptcy last year, two years after receiving the loan guarantee, and is the subject of an ongoing criminal investigation by the FBI.  Stearns’ investigation found that Solyndra's investors, Argonaut and Madrone, had planned for some time to use Solyndra's losses to reduce taxes on their other interests.  Government attorneys confirmed that as far back as 2010, Solyndra owners had “planned meticulously” to be able to use Solyndra’s net operating losses to offset future tax liabilities.

Because the Obama Administration subordinated the taxpayers in restructuring the Solyndra loan, in violation of the Energy Policy Act of 2005, the hedge fund investors are ahead of taxpayers in recovering any funds from Solyndra.  Under Solyndra's reorganization plan, the federal government would recover a maximum of about $24 million, less than 5 percent of the half-billion-dollar Department of Energy loan to Solyndra.  Added Stearns, “In the end, the U.S. Bankruptcy Court must act to maximize any return to the taxpayers, not to the hedge fund investors.”