It looks like Friday is the day that key that investors in Solyndra, the now-bankrupt Fremont, California thin-film solar firm, get questioned by Reps. Henry A. Waxman (D-CA) and Diana DeGette (D-Colo.) at the House Energy and Commerce investigative subcommittee.
Executives from the two family funds, Argonaut Private Equity and Madrone Capital Partners, will be called to testify at a hearing as soon as Friday -- that would be Steve Mitchell, managing director of Argonaut Private Equity and Jameson McJunkin, general partner of Madrone Capital Partners. CEO Brian Harrison and CFO W.G. Stover Jr. are also expected to testify Friday about the collapse of the startup, the recipient of a $535 million loan from the DOE.
According to Dana Hull of San Jose Mercury News, "Attorneys for Solyndra CEO Brian Harrison and CFO Bill Stover say their clients intend to invoke Fifth Amendment Friday."
Allegations have been made by the Republican Party that the loan was rushed through because George Kaiser of Argonaut Equity was an Obama fundraiser. Argonaut was the largest private investor. Note that Madrone is the Walton family fund, which tends to invest in the Republican direction.
Having sat through the previous week's hearings featuring Jonathan Silver of the DOE, I feel safe in saying that little will be discovered other than that our grandstanding politicians are not serving the people very well.
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House Judiciary Chairman Lamar Smith (R-Texas) has asked Attorney General Eric Holder to appoint an outside investigator to investigate whether the Obama administration had political motivations when it approved a $535 million federal loan guarantee in 2009 for Solyndra, according to the Huff Post.
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Dan Primack of Fortune performs his usual succinct analysis on the Solyndra financing:
Solyndra: While everyone continues to ignore Solyndra’s fundamental business model mistakes -- and how they were missed in DOE due diligence -- lots of attention is being paid to the fact that some of Solyndra’s investors are scheduled to be repaid before the federal government. More specifically, Argonaut and Madrone -- earlier equity investors who contributed $75 million in debt restructuring after the DOE loan -- have priority if Solyndra actually has assets that anyone wants to buy.
Two thoughts on this:
(1) Of course they have priority. That’s how a restructuring works. Methinks some political commentators need to take Cap Table 101. And, remember, the priority only refers to the new debt. Earlier equity investments remain subordinate to the feds.
(2) I’ve also heard that the restructuring itself was some sort of partisan politics, since Argonaut is the investment vehicle of Democratic bundler George Kaiser. First, this ignores the fact that the $75 million was new money (i.e., new risk for Argonaut). More importantly, it also ignores that Madrone is an investment vehicle affiliated with Wal-Mart’s Walton family, who generally contribute to GOP causes.
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Media Matters does a fine piece on what the mainstream media gets wrong about the Solyndra debacle here.
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Here's the Washington Post on the "pseudo-debate" on Solyndra.