Charlotte Bankruptcy Lawyer Bryan W. Stone of Arnold & Smith, PLLC answers the question “What is Chapter 7 Bankruptcy?”
Yet another solar energy company subsidized by American taxpayers during the effort to save the United States’ economy from ruin has declared bankruptcy.
United States Representative Marcy Kaptur, a Democrat who represents Ohio’s 9th congressional district, helped secure nearly $3 million in federal earmarks for the bankrupt company, Xunlight Corp. In 2010, the company received $34.5 million in tax credits as a part of the so-called federal “stimulus” bill.
The “stimulus” was passed in February 2009 in response to the onset of the Great Recession in order to save jobs and prevent further economic damage caused by the recession, which officially ended later that year. Since that time, the Obama Administration and numerous members of Congress have been criticized for securing billions of dollars in aid and tax credits for companies that subsequently when bankrupt.
A number of the bankruptcies involved solar-energy companies like Xunlight.
Taxpayers aren’t the only ones feeling stung by the latest solar-energy investment bust. In 2008, the University of Toledo Foundation invested $3 million in Xunlight. It ultimately had to forgive $1 million of Xunlight’s debt and received an ownership stake in one of the company’s manufacturing lines instead.
In addition, the Toledo-Lucas Port Authority loaned Xunlight $3 million in 2009. That money was drawn from the Authority’s Northwest Ohio Bond Fund. Xunlight also accepted a $3 million grant from the National Institute of Standards and Technology, a $4 million loan from the State of Ohio, and some $2 million in state and local tax credits.
Xunlight filed for Chapter 7 bankruptcy, meaning it plans to liquidate its remaining assets and close down. The company only has about $1.9 million in assets, against some $28.5 million in debts. The company’s largest creditor is Swiss-based Emerald Technology Ventures, a venture-capital fund that is owed some $11.4 million by Xunlight.
A former president of the company, John Buckey, said Xunlight failed because the price for solar cells dropped by three and four-fold since the company began producing flexible solar panels. Economics observers have criticized public investment in private solar energy companies, arguing that the companies’ products are too expensive—when compared with foreign competition—to generate profits.
The company was founded under the name Midwest Optoelectronics in 2002 by University of Toledo physics professor Xunming Deng, who developed the technology for the flexible solar panel products as a part of his work at the university. Deng served as the chief executive officer and chairman of the company’s board until 2012.
Creditors of the company were scrambling to determine how much of the debt owed by Xunlight they would be able to recover.
The current chief executive officer of the University of Toledo Foundation—now called Rocket Innovations—said the bankruptcy was disappointing, but not a surprise.
If you find yourself needing the services of a Charlotte, North Carolina bankruptcy attorney, please call the skilled lawyers at Arnold & Smith, PLLC find additional resources here. As professionals who are experienced at handling all kinds of bankruptcy matters, our attorneys will provide you with the best advice for your particular situation.
About the Author
Bryan Stone is a Partner with Arnold & Smith, PLLC, where he focuses his practice on all aspects of bankruptcy, including: Chapter 7, Chapter 11, Chapter 13, home loan modifications and landlord-tenant issues.
A native of Macon, Georgia, Mr. Stone attended the University of Georgia, where he earned a BBA in Banking and Finance, and Wake Forest University School of Law, where he obtained his law degree.
Following law school, Mr. Stone relocated to Charlotte, where he currently serves as Chair of “Bravo!” – a young professionals organization associated with Opera Carolina – and founded the University of Georgia Alumni Association of Charlotte.
In his spare time, Mr. Stone enjoys perfecting his barbeque skills for the annual “Q-City BBQ Championship” and playing softball in the Mecklenburg County Bar softball league.
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