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Politics : Politics for Pros- moderated -- Ignore unavailable to you. Want to Upgrade?

To: FJB who wrote (506521)	9/5/2012 12:52:45 PM
From: Glenn Petersen	2 Recommendations Respond to of 793996

The corpse of Solyndra may have more value than the original business. Solyndra's Backers Could Reap More Than $300 Million in Tax Breaks By PEG BRICKLEY Wall Street Journal September 4, 2012, 6:07 p.m. ET Losses at solar power equipment maker Solyndra LLC racked up during its brief existence could translate into more than $300 million of tax breaks for private equity backers in the future, new court papers say. One of Solyndra's backers is a fund connected to George Kaiser, who raised money for President Barack Obama's campaign. The connection turned Solyndra's collapse, one of many failures that swept through the young solar power industry in recent years, into a campaign cause for Republican presidential candidate Mitt Romney. The White House has said there is no evidence the loan decision was politically motivated. Revelations about the possible future tax breaks for Solyndra's private equity owners came in response to demands from the U.S. Department of Energy, which is owed $528 million, for more information about Solyndra's Chapter 11 exit plan. The potential for tax breaks was disclosed in plan documents, but Solyndra didn't estimate what they could be worth to Kaiser's Argonaut Venture Partners I LLC and Madrone Partners LP, another private equity fund that helped get the company off the ground. Papers filed Tuesday by Solyndra's lawyers say that, under a best-case scenario, the shell company that will be the sole corporate remnant of Solyndra may be able to reap tax breaks from $306 million to $341 million. Before it can enjoy those tax breaks, however, the post-bankruptcy Solyndra shell will have to, first, be in business, and second, make a lot of money, from $875 million to $975 million worth of taxable income. As of now, the private equity funds have no plan for the shell company's future business, court papers say. They are taking the empty corporation out of bankruptcy, and expect to invest capital in it, buying a business in order to use the Solyndra-generated operating losses to get tax breaks. The estimate of what those breaks could be worth assumes that all of Solyndra's net operating losses will be available to the shell company. Complex tax regulations generally limit the use of operating losses to cut down on future taxes. The estimate also assumes that the post-bankruptcy shell company will be subject to a 35% tax rate, court papers say. Solyndra itself is out of business, having raised only about $13 million in a series of auctions. The company's most valuable property, real estate in California, is due to be sold for upward of $90 million. During the year since its bankruptcy filing, lawmakers scrutinized Solyndra's finances, looking for evidence of White House influence on the decision to put taxpayer dollars at risk in the new company. They found complaints by the Treasury Department that its review of the Energy Department loan was rushed. online.wsj.com