The Solyndra bankruptcy is starting to take on some disturbing aspects. Federal investigators have removed records from company headquarters and visited the homes of three executives. There are concerns that the company misled the government about its financial health in securing its half billion dollar reward, and in landing a favorable loan refinancing earlier this year.
The $535,000,000 was essentially approved before full due diligence was completed. In March 2010 the company's auditors said, “The Company has suffered recurring losses from operations, negative cash flows since inception and has a net stockholders’ deficit that, among other factors, raise substantial doubt about its ability to continue as a going concern.” Now, I can understand why an investor would stay with a company whose viability was questioned by its auditors, especially if sophisticated investors had put over $1 billion into the company. I can't understand why full due diligence was not practiced. Nor can I understand why the CEO would give an overly optimistic presentation (revenues are skyrocketing, orders are setting records, we're hiring, etc.) to a House Subcommittee in July when the company had to go belly up six weeks later.
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