Solyndra U.S. Trustee requests trustee appointment or case conversion

By Caroline Salls

Pittsburgh, Sept. 30 - Solyndra, LLC's U.S. Trustee asked the U.S. Bankruptcy Court for the District of Delaware to either appoint a Chapter 11 trustee to oversee the company's bankruptcy case or convert the Chapter 11 case to Chapter 7, according to a Friday court filing.

Region 3 U.S. Trustee Roberta A. DeAngelis said she filed the motion "because of the refusal by the CEO and CFO of Solyndra, LLC and 360 Degree Solar Holdings, Inc., to testify and answer questions about the debtors business affairs and because of ongoing investigations which threaten to distract those officers from the performance of their duties in the bankruptcy cases."

Specifically, DeAngelis said the companies' officers' assertion of constitutional privilege against self-incrimination, as well as other facts and circumstances of the case, will prevent current management from fulfilling the disclosure and reporting obligations required of all debtors-in-possession.

The U.S. Trustee said the officers will also be prevented "from serving with the transparency so vital to the proper functioning of the bankruptcy system."

"The issue is whether management's refusal to answer questions about the debtors' finances and operations prevents the debtors' current management from properly exercising their fiduciary responsibilities," DeAngelis said in the motion.

"At this juncture, the United States Trustee alleges no specific wrongdoing."

However, DeAngelis said the refusal to answer questions constitutes cause for appointment of a Chapter 11 trustee.

A hearing is scheduled for Oct. 17.

Solyndra, a Fremont, Calif.-based manufacturer of cylindrical solar photovoltaic systems for large industrial and commercial rooftops, filed for bankruptcy Sept. 6. The Chapter 11 case number is 11-12799.

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