Solyndra LLC had such steep financial problems in late 2010 that the company violated terms of its loan-guarantee agreement with the Department of Energy and technically defaulted on its $535 million loan, according to people familiar with the matter.
The failed solar-panel maker, which is under numerous criminal and congressional investigations, ran so short of cash in December 2010 that it was unable to satisfy certain terms of its U.S. loan agreement, these people said. The agreement required Solyndra to provide $5 million in equity to a subsidiary building its factory but cash-flow problems prevented those payments.
WSJ’s Ryan Tracy reports a new Congressional report says warnings about Solyndra’s competitive abilities came out before the government awarded the company a $535 million loan guarantee and the company’s subsequent collapse.
The Energy Department ultimately restructured the loan agreement to help keep the company afloat and Solyndra continued to draw money from its loan.
Solyndra’s cash-flow problems in late 2010 had previously come to light but it was not known that the company technically defaulted on its loan and violated its agreement with the U.S. government.
I guess this means that the people who repeatedly told us during the debt ceiling crisis that it would be terrible for the U.S. to default (a position I agreed with then, and agree with now), are presently telling us that it isn’t newsworthy that a government-backed business defaulted on loans that it had to pay back to the United States government.