A California solar panel manufacturer that received more than a half-billion dollars in government loan guarantees filed for Chapter 11 bankruptcy Tuesday and plans to seek a buyer for the company.
Solyndra LLC, based in Fremont, Calif., becomes the latest in a series of failures in the U.S. solar business, which has been beset by oversupply and competition from abroad.
The company, which makes unique solar tubes that can soak up sunlight from many different angles, has struggled recently to raise capital as the economy soured. Investors turned away from solar companies as profit margins were squeezed by declining prices for solar wafers and rising supplies. Experts also expressed doubt about the future of government incentive programs.
Solyndra owes $783.8 million, including loans of $527.8 million to the federal government, according to documents filed with the U.S. Bankruptcy Court in Delaware.
Solyndra said in its filing that it would look for a suitor to buy the entire company out of bankruptcy, and if it couldn't, it would liquidate its assets piecemeal to pay creditors.
The company announced last week that it would seek bankruptcy protection and lay off 1,100 workers, virtually its entire workforce. Lawmakers used the announcement to criticize President Barack Obama's support for green technologies.
Solyndra, once considered a rising star in the solar industry, received $535 million in loan guarantees and $1 billion in private investment. Obama visited the company last year, as did other officials, including former California Gov. Arnold Schwarzenegger and Energy Secretary Steven Chu.
Two other prominent solar companies, Evergreen Solar Inc. and Spectrawatt Inc., both sought bankruptcy protection in August. Spectrawatt's CEO said the company could not compete with solar manufacturers in China, which receive "considerable government and financial support."
Former Solyndra employees filed a class-action lawsuit against the company in response to the bankruptcy, saying that Solyndra failed to properly notify them. They're seeking extra wages and benefits, according to a separate complaint filed with the bankruptcy court.