Solyndra files Chapter 11 plan; Argonaut Ventures, Madrone to sponsor

By Caroline Salls

Pittsburgh, July 30 - Solyndra LLC filed its plan of reorganization and related disclosure statement Friday with the U.S. Bankruptcy Court for the District of Delaware.

Solyndra said the plan sponsors are Argonaut Ventures I, LLC and Madrone Partners, LP.

The company said the proposed plan incorporates multiple settlements among the Solyndra debtors, some pre-bankruptcy lenders, WARN Act plaintiffs, some creditors and interest holders and the company's official committee of unsecured creditors.

As a result of these settlements, there will be distributions to holders of general unsecured and priority claims.

Under the plan, the holding company will be reorganized, and the plan sponsors will provide a holdings settlement fund that will maximize value for the benefit of holders of general unsecured claims against the holding company, result in the reduction of claims against Solyndra and preserve tax attributes of the holding company estate.

Also under the plan, the assets of Solyndra, except trust avoidance claims, which will vest in a Solyndra settlement trust, will be vested in a Solyndra residual trust and liquidated for the benefit of creditors.

According to the disclosure statement, the plan sponsors will also provide exit financing and a Solyndra settlement fund loan, the proceeds of which will be contributed to the Solyndra settlement trust to benefit holders of Solyndra general unsecured claims who agree to forego any claims against the holding company.

Creditor treatment

Treatment of creditors will include:

• Administrative claims, priority non-tax claims will be paid in full in cash;

• Holders of miscellaneous secured claims will either be paid in full or receive the collateral securing the claim, or the right to the claim will remain unaltered;

• After payment of the tranche I exit facility and Solyndra settlement fund loan, holders of pre-bankruptcy tranche A claims will receive a share of Solyndra net lender distributable assets and, after payment of the tranche II exit facility, a share of Solyndra residual trust interests;

• After payment of the tranche A claims, each holder of a pre-bankruptcy tranche B claim will receive a share of the Solyndra net lender distributable assets and, after payment of the tranche II exit facility, a share of the Solyndra residual trust interests that were distributed or made available to the Holders of pre-bankruptcy tranche A claims;

• After payment of the pre-bankruptcy tranche A and tranche B claims, each holder of a pre-bankruptcy tranche D claim and pre-bankruptcy tranche E claim will receive a share of the Solyndra net lender distributable assets and, after payment of the tranche II exit facility, a share of the Solyndra residual trust interests that were distributed or made available to holders of pre-bankruptcy tranche B claims;

• Holders of general unsecured claims against the holding company will receive a share of the holding company settlement fund and, after payment of the tranche II exit facility, a share of any proceeds of retained rights of action of the reorganized holding company up to the full allowed amount of the claim;

• Holders of general unsecured claims against Solyndra will receive a share of the Solyndra settlement trust interests, which entitles them to a share of the Solyndra settlement fund, a share of Solyndra residual trust interests after payment of the tranche II exit facility and a share of the proceeds from any residual net lender distributable claims assets after all pre-bankruptcy lender claims have been paid in full;

• The rights of holding company interest holders will be left unaltered; and

• Holders of Solyndra interests will receive no distribution.

The disclosure statement hearing is scheduled for Sept. 7.

Solyndra is a Fremont, Calif.-based manufacturer of cylindrical solar photovoltaic systems for large industrial and commercial rooftops. The company filed for bankruptcy on Sept. 6, 2011. Its Chapter 11 case number is 11-12799.

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