With Solyndra’s Last Breath, It Sues Suntech
Solyndra, the solar cell manufacturer that infamously filed for Chapter 11 bankruptcy after winning millions in U.S. government loan guarantees, is on the offensive. The company, bankrupt since August 2011, is seeking $1.5 billion in damages from Suntech Power Holdings (NYSE:STP), Trina Solar (NYSE:TSL), and Yingli Green Energy Holding (NYSE:YGE), which it claims collaborated in price-fixing and other unsavory practices in order to run U.S. competitors out of business.
“It’s obvious that this lawsuit is a misguided effort by Solyndra to find scapegoats for its failure to commercialize its technology at a competitive price point,” said Suntech America managing director E. L. McDaniel, according to Bloomberg. The collapse of Solyndra was widely publicized because it was the first company to receive a loan guarantee under President Barack Obama’s stimulus program. However desperate the case may seem, it comes as the U.S. Commerce Department issues strong anti-dumping and countervailing duties on Chinese solar imports.
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Solyndra is seeking bankruptcy-court approval of a plan to pay creditors that has attracted negative attention from the government. The Internal Revenue Service sees the company’s plan as a way to try and obtain nearly $1 billion in tax benefits. The U.S. Department of Energy is looking for a resolution where its claim is protected.
American solar manufacturers First Solar (NASDAQ:FSLR) and SunPower (NASDAQ:SPWR) survived what Solyndra is calling a conspiracy to fix prices and create a monopoly, although apparently just barely. Both companies have lost substantial share value this last year to date, and will struggle to regain ground even after the government’s new tariffs. Demand for solar power isn’t as high as it needs to be to sustain tangible growth, despite support from the government. Chinese solar companies are still likely to remain competitive in the United States while supply remains high and production takes time to wind down.
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