Solyndra Lawsuit: War of the Solar Dead Solyndra

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body-solyndra-lawsuit-war-of-the-solar-dead-solyndra.jpg The fight for survival among the world's embattled solar panel makers is starting to look more like a battle of the dead, with word that bankrupt US player*Solyndra*is suing 3 of its biggest Chinese rivals over allegations of running an illegal cartel.*Some of you might be saying: "Wait a minute, doesn't Solyndra have better things to do than to be

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  • bmetbmet ✭✭ Solar Expert Posts: 630 ✭✭
    Re: Solyndra Lawsuit: War of the Solar Dead Solyndra

    I read a different take on the British site The Register. Don't have time to link it right now, will try to find it after work.
  • ggunnggunn ✭✭✭ Solar Expert Posts: 1,973 ✭✭✭
    Re: Solyndra Lawsuit: War of the Solar Dead Solyndra

    It occurs to me that if the Chinese government is pouring billions into solar module manufacturing companies so that they can sell them over here for less than it costs to make them, then that is a net flow of material wealth from China into the US for a change. I'm just sayin'... :D
  • BB.BB. admin Super Moderators, Administrators Posts: 29,634 admin
    Re: Solyndra Lawsuit: War of the Solar Dead Solyndra

    Companies have losses that can be used as tax deductions in the future--If they can keep the shell of the company operating, then it is possible that those losses can be carried forward or sold off as "assets" in their own right.

    Bankrupts should be the end of the paper losses, but at least one company (GM) has got agreement from the government to keep the losses "active". Some numbers:
    Having sold off its manufacturing plant, fired nearly 1,000 workers and proven the non-viability of its business model, Solyndra's only real assets are what the IRS calls "tax attributes." These are between $875 million and $975 million in net operating losses that can reduce future taxable income, which the IRS values as high as $350 million. Before it went toes up, Solyndra also accumulated $12 million in solar tax credits that can reduce tax liabilities dollar for dollar.

    Tax-loss carry-forwards are routine but worthless if a company can't turn profits to pay taxes on. So Solyndra's owners are asking the court to liquidate the rest of the business and contribute a net $6.7 million to pay off creditors for pennies on the dollar. A holding corporation will then emerge from Chapter 11 that won't make products or employ workers, but it will get the Solyndra tax offsets.
    ...

    If the Administration allows this to happen (and remember that in the GM boondoggle, Obama waived the traditional rules that have bankrupt companies losing their tax loss carryforwards, giving GM a multi-billion dollar tax subsidy almost no one counts in the bailout costs), ...

    -Bill
    Near San Francisco California: 3.5kWatt Grid Tied Solar power system+small backup genset
  • ggunnggunn ✭✭✭ Solar Expert Posts: 1,973 ✭✭✭
    Re: Solyndra Lawsuit: War of the Solar Dead Solyndra

    No offense intended, but whenever I read a statement that says something like "... Obama waived the traditional rules..." followed by some perceived negative economic impact, I write it off as political propaganda.
  • BB.BB. admin Super Moderators, Administrators Posts: 29,634 admin
    Re: Solyndra Lawsuit: War of the Solar Dead Solyndra

    OK, here is an academic paper from Harvard Law / Indiana U Business Dept:

    J. Mark Ramseyer
    Harvard Law School

    Eric Bennett Rasmusen
    Indiana University Bloomington - Department of Business Economics & Public Policy

    July 1, 2011

    Harvard Law and Economics Discussion Paper No. 690

    Abstract:
    To discourage firms from trying to buy and sell tax deductions, Sec. 382 of the tax code limits the ability of a firm that acquires another company to use the target's "net operating losses" (NOLs). Under the Troubled Asset Relief Program (TARP), the Treasury lent a large amount of money to GM. In bankruptcy, it then agreed to trade that debt for stock.

    GM did not make many cars anyone wanted to buy, but it did have $45 billion in NOLs. Unfortunately for the firm, if the Treasury now sold the stock it acquired in bankruptcy it would trigger those Sec. 382 NOL limitations. Suppose the newly reorganized GM did start making cars that consumers wanted. It would be able to use only a modest portion of its old NOL’s -- if any.

    Treasury "solved" this problem by issuing a series of "Notices" in which it announced that the law did not apply. On its terms, Sec. 382 states that the NOL limits apply whenever a firm's ownership changes. That rule, the Treasury declared, did not apply to itself. Notwithstanding the straightforward and all-inclusive statutory language, GM would be able to continue to use its NOLs in full after the Treasury sold its stock.

    The Treasury had no legal or economic justification for these Notices, which applied to Citigroup and AIG as well as to GM. Nonetheless, the Notices largely escaped public attention -- even though they potentially transferred substantial wealth to the most loyal of the administration's supporters (the UAW). That it could do so illustrates the risk involved in this kind of manipulation. We suggest that Congress give its members standing to challenge such manipulation in court.

    When the government owns a large part of a company and holds a large amount of paper--Then "bending" the tax code in favor of companies that the government has interests in becomes par for the course.

    -Bill
    Near San Francisco California: 3.5kWatt Grid Tied Solar power system+small backup genset
  • ggunnggunn ✭✭✭ Solar Expert Posts: 1,973 ✭✭✭
    Re: Solyndra Lawsuit: War of the Solar Dead Solyndra
    BB. wrote: »
    OK, here is an academic paper from Harvard Law / Indiana U Business Dept:



    When the government owns a large part of a company and holds a large amount of paper--Then "bending" the tax code in favor of companies that the government has interests in becomes par for the course.

    -Bill
    I noticed right off that Obama's name does not appear anywhere in that article.
  • BB.BB. admin Super Moderators, Administrators Posts: 29,634 admin
    Re: Solyndra Lawsuit: War of the Solar Dead Solyndra
    The Treasury had no legal or economic justification for these Notices, which applied to Citigroup and AIG as well as to GM. Nonetheless, the Notices largely escaped public attention -- even though they potentially transferred substantial wealth to the most loyal of the administration's supporters (the UAW). That it could do so illustrates the risk involved in this kind of manipulation.

    Which "administration" would that be then?

    Anyway--I was actually making the larger point that any administration/government owning corporations (including www.freddiemac.com and www.fanniemae.com can) be corrupted to bend laws and regulations to favor their supporters.

    -Bill
    Near San Francisco California: 3.5kWatt Grid Tied Solar power system+small backup genset
  • ggunnggunn ✭✭✭ Solar Expert Posts: 1,973 ✭✭✭
    Re: Solyndra Lawsuit: War of the Solar Dead Solyndra
    BB. wrote: »
    Which "administration" would that be then?
    It would be a mistake to attribute all the actions of an administration to any one person, even the President. It's the Blame Game and politics as usual. Both sides do it, of course.
  • BB.BB. admin Super Moderators, Administrators Posts: 29,634 admin
    Re: Solyndra Lawsuit: War of the Solar Dead Solyndra

    Got to hold somebody responsible. If you don't like what they are doing, vote them out of office.

    My fear is an embedded bureaucracy such as Japan and Europe/EU. They are not even affected by changes in administrations. There has been a fair amount of that going on in the US Government, converting appointed offices/officials into civil service.

    -Bill
    Near San Francisco California: 3.5kWatt Grid Tied Solar power system+small backup genset
  • ggunnggunn ✭✭✭ Solar Expert Posts: 1,973 ✭✭✭
    Re: Solyndra Lawsuit: War of the Solar Dead Solyndra
    BB. wrote: »
    Got to hold somebody responsible. If you don't like what they are doing, vote them out of office.

    My fear is an embedded bureaucracy such as Japan and Europe/EU. They are not even affected by changes in administrations. There has been a fair amount of that going on in the US Government, converting appointed offices/officials into civil service.

    -Bill

    Not necessarily. Not everything that happens is the fault of anyone in particular. Out pf power politicians trying to unseat incumbents would have you believe that the incumbents are to blame for everything from debt crises to recessions to unemployment to high gas prices to volcanoes, hurricanes, and earthquakes. The truth is that the person sitting in the Big Chair doesn't have that much to do with any of it. The present economic problems in the US (and the rest of the world, BTW. Coincidence? I think not.) are the result of chickens that have been flying around for decades finally coming home to roost and don't have any more to do with anything that has happened during the last four years than with what went on before. That's not what the Republicans want you to believe, though, but I hasten to add that if their positions were reversed the Democrats would be doing the same thing.

    And yeah, I know, chickens can't fly. :D
  • nsaspooknsaspook ✭✭✭ Solar Expert Posts: 396 ✭✭✭
    Re: Solyndra Lawsuit: War of the Solar Dead Solyndra
    ggunn wrote: »

    And yeah, I know, chickens can't fly. :D

    ;) https://www.youtube.com/watch?v=AMeCjMx9Bds&feature=related;)
  • nielniel ✭✭✭✭ Solar Expert Posts: 10,311 ✭✭✭✭
    Re: Solyndra Lawsuit: War of the Solar Dead Solyndra

    it seems to me the help our government gives is similar and could also be viewed as reason for the rep of china to continue the help to their domestic companies. we can't cry unfair when our government is funneling monies too. of course there is a difference between a loan and outright state propping or sponsorship.
  • ggunnggunn ✭✭✭ Solar Expert Posts: 1,973 ✭✭✭
    Re: Solyndra Lawsuit: War of the Solar Dead Solyndra
    niel wrote: »
    it seems to me the help our government gives is similar and could also be viewed as reason for the rep of china to continue the help to their domestic companies. we can't cry unfair when our government is funneling monies too. of course there is a difference between a loan and outright state propping or sponsorship.
    But the US government does subsidize private industry. Oil, gas, and coal companies enjoy large government handouts of tax monies. And don't get me started on tobacco subsidies... :D
  • BB.BB. admin Super Moderators, Administrators Posts: 29,634 admin
    Re: Solyndra Lawsuit: War of the Solar Dead Solyndra

    I am of mixed mind on Tobacco in general.

    Much of the trade (and taxes that funded governments) with the "new world" was based on people wanting tobacco and other things that we realize is hazardous to health today. Even today--government still collects taxes on "sin" (tobacco, alcohol, medications with side effects, gambling, etc.).

    When people harm themselves, that is one thing. It is another when they go to the government to "fix" the results of that harm (welfare, government provided health care, etc.). When that happens, it is hard pressed for folks that want "freedom" to do their thing when somebody else is paying the freight to address the results of their choices (smoke, drugs, eating too much, gambling losses, etc.).

    In the last debate, there were 4 billion dollars worth of oil/energy subsides. And there were something like $40-80 billion worth of green energy subsides last year (last few years of green subsidies?).

    One actually has measurable results. The other--the positive returns are mostly because of paper work and laws that subvert normal supply/demand/results of investments/activities.

    For example, all of the green energy "investments" in Germany have ended up leaving them with an unstable power network (wind blows when wind blows--not when customers need power).

    However, relying on aging nuclear plants in France, where Germany was making up for internal shortfalls of energy (and the decommissioning of nukes in Germany after the Japan earthquake) does not show "conventional" power is without its issues either.

    -Bill
    Near San Francisco California: 3.5kWatt Grid Tied Solar power system+small backup genset
  • ggunnggunn ✭✭✭ Solar Expert Posts: 1,973 ✭✭✭
    Re: Solyndra Lawsuit: War of the Solar Dead Solyndra
    BB. wrote: »
    I am of mixed mind on Tobacco in general.

    Much of the trade (and taxes that funded governments) with the "new world" was based on people wanting tobacco and other things that we realize is hazardous to health today. Even today--government still collects taxes on "sin" (tobacco, alcohol, medications with side effects, gambling, etc.).
    Well, my take on it is that it is hypocritical for the US to subsidize the growing and export of tobacco while at the same time sending armed forces into other countries to interdict the production of, say, marijuana, when tobacco has killed millions of people and the total deaths attributed directly to marijuana total... what? One? Some will be quick to point to all the deaths in Mexico due to the the "Drug War" there, but I submit that the efforts by the US government to stop the marijuana trade are participatory in those deaths. A government cannot declare a War On Drugs and not expect return fire, especially when a large segment of its population is supporting the other side.

    OK, this is far afield from renewable energy issues. I apologize for the diversion.
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