Running head: SOLYNDRA SOLAR COMPANY 1
Solyndra Solar Company
Name
Institution

SOLYNDRA SOLAR COMPANY
Solyndra Solar Company
Background
Solyndra is a start-up solar energy company founded in 2005 in Fremont California by a
Dr. Chris Granet. It specialized in the manufacture of tubular solar panels which were unequaled in the solar industrymarket by any other solar products on offer as all other solar manufacturers used the traditional flat panels Solyndra photovoltaic (PV) solar system did not need to be to be placed strategically or anchored down like other traditional solar panels that used ballast anchoring that had its own effects on the efficiency of the solar panels to absorb light energy from the sun (David 2008).
Solyndra’s woes began on 31 st
august 2011 when it filled for chapter 11 bankruptcy this was 24 months after receiving half a billion loan grant from the US energy department & an additional $ 25.1 million tax break from California’s Alternative Energy & Advance
Transportation Authority (CAEATA)they were granted so as a to help Solyndra finance the construction of a solar panel manufacturing plant, this loans were made possible as a result of an energy law passedin 2005 that authorized the department to issue federally backed loans for innovative projects that helped limit air pollution .
1.100 employees were laid off and manufacturing & production halted as the company had as off that moment become defunct , reasons given were that production was getting to expensively & solar panel prices were plummeting & as a result of competition from Chinese manufacturers the last nail on
Solyndra’s coffin was hammered in by an august 30 th
where the administration failed to agree on the injection of additional capital thus leaving Solyndra twisting in the wind with technically no money to run its operations (McGrew 2011).
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Legal and Ethical Issues Surrounding Solyndra
Within a few weeks before and a few after filing for bankruptcy, Solyndra was under investigation by the federal criminal investigations through the US. Attorney’s office & department of justice.
Legal issues
Legal issues to be addressed were whether the company and those who were responsible in it misrepresented the actual state of the firm’s financial health or if there was accounting malpractice involved (Washington post 2011) There was a hoard of many other legal issues raised by the House committee especially the Republican faction who raised issue on Solyndra’s refusal to discuss customer contracts as it was in the process of engaging a trustee to take charge of the fragging energy firm (ABC
News 2011)The issue of private investors being given their money back if Solyndra went belly up before the tax payers were was touted as going against the energy law of 2005.( U S. Office of the trustee an arm of justice dept.).
Legal Issues Filled by Employees
Solyndra's, laid off employees sued the company &asked to be compensated as they argued that Solyndra did not acknowledge the WARN (Workers Adjustment & Retraining notification) acts which stipulated that they had to be forewarned within 60 days before being laid off the suit sought the payment of their 60 days pay, 401(k) contributions & health benefits for the more than 1,100 employees who got laid off minus severance pay (The Sanfrancisco chronicle 2011)
Ethical Issues Facing Solyndra
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It was revealed that one of the biggest share holders of Solyndra George Kaiser was a financier of the Obama presidential campaign and therefore is said to have used this clout to influence quick release of the half a billion loan without due diligence having being carried out
(Texas Vox 2011) The energy department was also accused of having asked the management of
Solyndra not to lay off until after the primary elections of 2010 also their denial of Solyndra’s having financial woes even when they knew it to be a fact is a sign of ethical failing on the departments side.( Washington post)
Two Laws and an Ethical Code that Apply to the Situation
Some of the laws that were ignored in the Solyndra case were the energy policy act of
2005 which explicitly states that “ DOE (Department of Energy) shall consult with OMB and the
Secretary of the Treasury before granting any deviation in the loan," they ignored this law when they chose to award private investors their dues before they did so for private investors.
The other law usurped by the solar company was the evasion of taxes by filling for bankruptcy so that they could keep millions of dollars of net operating losses that would be used in the reorganization (United States Department of Justice, 2012)
The ethical code abused was that one of honesty where by Solyndra did not inform the
DOE about its financial woes, it was proved that the company was in the straits before getting the restructured loan when it was discovered that one of its chief financiers George Kaiser a prominent fundraiser for President Obama, provided $75 million to help position Solyndra in a better of state in February at the time of the government's refinancing (Trivedi, 2012).
An Ethical Framework That Applies To This Situation
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An ethical framework that applies to the case ofSolyndra is one in which the government should not engage the particular industries such as start up companies as a venture capitalist &its only function in matters energy or business be to create an ethical frame work that levels the playing field for all players involved in it that is both fossil fuel fired & renewable energy start ups and regulating it equitably and having both be responsible for the adverse effects that come of their activities be it contribution to global warming or misuse of grants for green energy projects, this the administration can achieve by enacting a cap and trade market or carbon tax, policies ( Woody, 2011).
Milton Friedman’s Philosophy As Applies To This Situation
Milton fried man was a 20 th
century economist, who advocated for free markets unencumbered by government meddling, he argued that without government regulations the markets would flourish, he drew a sharp distinction between the market and the state through his television show “free to choose” he used simple language to relay the importance of unregulated markets, and many nations followed this liberalization line of thought where countries privatized most of their state corporations (Global Public Square, 2011).
As Professor Milton Friedman’s theory relates to Solyndra, we can say that had the government left the energy firm to its own devices and leave the speculation to market experts such as venture capitalists then what transpired in the closure of the firm and the loss of half a billion of tax payers money would not have happened.
How Have These Issues Influenced the Solyndra Executives?
As relates to the ethical and legal proceedings of the bankruptcy case of the energy firm most of the Solyndra executives pleaded the fifth when they went in front of the house
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SOLYNDRA SOLAR COMPANY committee, some of the senior employees of Solyndra have recently worn an action suit to have bonuses repatriated to them in the amount of $ 370, 000 after the companies full liquidation is achieved. Most of the investors of Solyndra agree that hadn’t the governmentinterfered in the running of the Silicon Valley energy firm it would have weathered the storms it was going through (LA Times 2012).
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References
David B. (7 October 2008). "Cylindrical Solar Cells Give a Whole New Meaning to Sunroof".
Scientific American. Retrieved 13 June 2012. From http://www.scientificamerican.com
Baker, David R. (7 September 2011). "Solyndra files bankruptcy, employees sue" . The San
Francisco Chronicle p4
Washington Post, (7 October 2011) “ Solyndra loan deal: Warning about legality came from within Obama administration”p18
Washington Post, (29 September 2011) Chu takes responsibility for a loan deal that put more taxpayer money at risk in Solyndra , p 3
Todd Woody (6 September 2011). "Solyndra: Pay Some Investors Before Taxpayers In Solar
Flame Out".
Retrieved 14 June 2012.from http://www.forbes.com
Trivedi, Shamik (2012) SOLYNDRA BANKRUPTCY PLAN SERVES TO AVOID TAX, DOJ
INSISTS .) Retrieved /11/10/ 2012)
United States Bankruptcy Court for the District of Delaware (2012) Bankruptcy Trustee Objects
To Confirmation Of Solyndra BankruptcyPlan.
(In re: Solyndra LLC et al.) (No. 11-
12799) Retrieved 10 /10 2012
Global publicsquare (11 October 2011) “ Milton-Friedman magic” Retrieved
2011/10/11blogs.cnn.com
LA Times (Feb 23 2012) “ Solyndra execs get bonus despite Solyndra filling for bankruptcy Retrieved 2012 Feb. 23 From http://articles.latimes.com
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Bowman, L. (1990, March 7). Bills target Lake Erie mussels. The Pittsburgh Press, p. A4.
??????>>>Don’t know where these fits in!
Grand-jury-begins-probe-of-bankrupthttp://www.washingtontimes.com/newsRetrieved 2011/12 /13/ http://texasvox.org/why-the-solyndra-solar-bankruptcy-scandal-is-a-big-deal-butnot Retrieved 2011/09/12/
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