Archive for October 13th, 2011

Article from SFGate.

“Solyndra CEO Brian Harrison, who refused to answer questions from Congress about his solar startup’s high-profile bankruptcy, has left the company, according to a new court filing.

Harrison stepped down on Friday, Solyndra reported in a bankruptcy court document filed late Tuesday. The company said Harrison left “as scheduled,” but didn’t elaborate. A Solyndra spokesman could not be reached for an explanation.

To replace Harrison, Solyndra wants to hire R. Todd Neilson, who served as bankruptcy trustee for boxer Mike Tyson and rap impresario Marion “Suge” Knight. Neilson has a background in forensic accounting, including a stint with the FBI as a special agent on white-collar crime cases.

If approved by the court, Neilson would serve as Solyndra’s chief restructuring officer, shepherding the company through the Chapter 11 process. Solyndra would also hire Neilson’s company – Berkeley Research Group, based in Emeryville – to help restructure or liquidate the company.

Neilson did not return a call seeking comment Wednesday.

Harrison led Solyndra for little more than a year, joining the Fremont company in July 2010. At that point, Solyndra was struggling.

In 2009, the company won a federal loan guarantee worth up to $535 million to build a factory for its tube-shaped solar modules. But by the time Harrison arrived, replacing founder Chris Gronet, the company had canceled plans for an initial public stock offering. Auditors questioned Solyndra’s chances for long-term survival.

Harrison, a former Intel executive, was unable to stop the company’s slide, as low-priced solar panels pouring into the market from China undercut Solyndra’s sales.

The company finally filed for bankruptcy on Sept. 6 of this year, igniting a political firestorm. FBI agents interviewed Harrison two days later, as part of an investigation into the accuracy of Solyndra’s financial statements.

Harrison and the company’s chief financial officer agreed to appear before a congressional subcommittee investigating Solyndra’s loans. But acting on the advice of their attorneys, both men refused to answer the subcommittee’s questions.

In July, Harrison had told members of the same panel that the company’s finances were on firm footing.

It’s not unusual for a company to switch CEOs during Chapter 11 proceedings, bankruptcy experts say. Often, companies bring in reorganization specialists who understand the bankruptcy process far better than the people they replace.

“It does help to have familiarity with the process,” said John Hansen, a partner in the Nossaman LLP law firm. “I’ve seen a lot of regular business people who’ve been in Chapter 11, and they’ve been very frustrated. It’s very restrictive, and they can’t always do what they want to do, the way they want to do it.”

In addition, involvement in a government investigation can interfere with an executive’s ability to do the job.

“When a CEO gets into a position where the company may be facing criminal prosecution or a criminal investigation, the likelihood of the CEO leaving gets pretty high,” said Eric Talley, co-director of the UC Berkeley Center for Law, Business and the Economy.

Like all corporate bankruptcies, Solyndra’s will be complex. In a separate set of bankruptcy court filings on Wednesday, a German company that designed equipment for Solyndra accused its former client of stealing its intellectual property.

Von Ardenne claims that it supplied Solyndra with machinery to deposit solar-cell materials on glass tubes, only to see the Fremont company build its own versions based on Von Ardenne’s designs.”

Read more here.

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