The United States Justice Department on Friday asked a bankruptcy court in Delaware to assign control over the solar panel maker Solyndra to a trustee because its top executives are refusing to answer any questions in the ongoing bankruptcy proceeding.
The trustee, which is part of the Justice Department, said that its motion with the court wasn’t about the company’s wrongdoing, but about being able to proceed in a manner that would most benefit the company’s creditors.
“The issue is whether management’s refusal to answer questions about the debtors’ finances and operations prevents the Debtors’ current management from properly exercising their fiduciary responsibilities,” wrote Roberta A. DeAngelis, the United States Trustee in a brief filed with the court on Friday.
DeAngelis said that Solyndra’s management had refused to answer any questions about its contracts even before their September 23, 2011 hearing in front of the House Energy & Commerce Committee where they pleaded the Fifth.
DeAngelis said that without management’s participation in the proceedings, it would be impossible to get any reliable information about the company’s finances.
Solyndra’s CEO Brian Harrison and Chief Financial Officer W.G. Stover refused to answer questions from the U.S. trustee about whether the information they submitted to their investors, creditors and others was accurate, said DeAngelis. They also declined to answer questions about profitability, whether the management was paid bonuses after they realized that the company was going to be unprofitable, and whether Solyndra “has a plan to repay the loan from the U.S. Government.”
Solyndra, according to Bloomberg News, is under investigation by the FBI for accounting fraud.
The company declared bankruptcy August 31. It was backed by a billion dollars from the private sector as well as a $535 million loan guarantee from the Department of Energy.
The alternative to the appointment of a trustee would be immediate liquidation wrote DeAngelis in the Friday court filing.
Separately, White House spokesman Jay Carney told reporters Friday that Energy Secretary Steven Chu has President Obama’s “full confidence,” even after Chu admitted that he personally approved of continued federal backing of Solyndra even after it had technically defaulted on its loan guarantee.
