Thursday, November 1, 2012

Obamanomics, Solyndra and Crony Capitalism

If ever there was a poster child for government ineptitude in picking winners and losers in the marketplace it’s the Solyndra scandal. Perceived by some as ‘yesterday’s story’, Solyndra is still very much news – a self-inflicted wound for the administration and a running sore for US taxpayers. Right now the IRS is fighting a courtroom battle to prevent Solyndra investors from misusing the bankruptcy laws to further sting US taxpayers.
But that’s only half of it. In an equally desperate bid to blame competitors for their failed business model, Solyndra’s backers have also lodged an unfair trading practices lawsuit against Chinese solar panel-makers.  Meanwhile, a whole raft of potential ‘Solyndras’ still await receipt of their own government’s largesse as part of the administration’s ‘green deal’. And if anyone wants to know what all that means in practice a snapshot of the Nevada energy market provides it.
Not happy with hoovering up £535 million in government loans, Solyndra investors are currently looking to take advantage of a tax loophole provided to them by a government administration desperate to avoid responsibility for the Solyndra debacle. Having lodged Chapter 11 bankruptcy hearing before the relevant court in Delaware, Solyndra investors are claiming that the only real assets the company has are “tax attributes”. They amount to between $875 and $975 million in net operating losses able to reduce future taxable income. The IRS values them at just $350 million. The company had also accumulated around $12 million in solar tax credits.  Solyndra investors now want the court to liquidate the business and contribute a net $6.7 million to pay its creditors just a few cents on the dollar. An emerging holding corporation – Argonaut Ventures LLC, owned by Solyndra investor and Obama-backer George Kaiser’s Foundation –  would make nothing and employ nobody but would still be eligible for the lucrative Solyndra tax offsets. Nice try.

Read more: http://www.canadafreepress.com/index.php/article/50725

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