WILMINGTON, Del. - A bankruptcy judge yesterday refused to grant more time to sell off the failed solar-panel maker Solyndra LLC.
The company got a $500 million federal loan guarantee and was once highlighted by President Obama in support of his administration’s economic policies.
In 2009, Solyndra became the first renewable-energy company to receive a loan guarantee under a stimulus program to encourage green energy. But the Fremont, Calif., company filed for Chapter 11 bankruptcy protection this month and laid off its 1,100 employees, spurring investigations by the FBI and Republicans in Congress.
Solyndra plans an Oct. 27 auction of its assets, assuming that more than one potential buyer emerges. But Solyndra’s unsecured creditors argued the sale process should be extended at least four weeks to drum up as much interest as possible and maximize return for creditors.
“We are concerned that there is a rush to sale here,’’ said Bonnie Glantz Fatell, an attorney for the creditors committee.
Judge Mary Walrath rejected the committee’s request, but ordered Solyndra to send a representative to an international trade show in Dallas next month.
Walrath authorized up to $4 million in debtor-in-possession financing for Solyndra, but the company and its secured lenders, including the Department of Energy, argued that it does not have enough cash to devote four more weeks to lining up potential buyers. Given the political firestorm surrounding Solyndra, anyone interested in the company already knows it’s for sale, they suggested.
Justice Department lawyer Matthew Troy said Solyndra does not have the cash to wait. He said Solyndra’s case is really a “Chapter 22’’ bankruptcy because a previous restructuring didn’t work.