Date: Feb 22, 2013 Author: Patricia Resende Source: bizjournals (
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It's been two weeks since the dust settled on Satcon Technology Corp.'s (Nasdaq: SATC) official closing, but it still seems unreal that yet another solar business has gone belly up.
The Boston, Mass.-based company, which filed for bankruptcy in October, gave up hope in finding a buyer for the clean energy business. The bankruptcy followed Satcon's report to the Securities and Exchange commission that it had defaulted on $16 million in debt.
At that time, CEO Steve Rhoades said it was a "difficult time" for Satcon and that the bankruptcy filings were a "necessary and prudent step" that would help the company reorganize with a stronger balance sheet. The plan, he said, was to emerge from bankruptcy and continue to give customers the products they need.
That didn't happen.
When it didn't get any bids from potential buyers that would make its lenders Silicon Valley Bank and Compass Horizon Funding Company LLC happy, it made the decision to transition from bankruptcy to Chapter 7 liquidation. Satcon's total value is between $36 million and $42 million and value of its assets were estimated at $32 million, according to documents filed in bankruptcy court.
Satcon's demise started long ago. The maker of power conversion solutions for the renewable energy market, primarily for large-scale commercial and utility-scale solar photovoltaic markets, reported losses from 2005 to 2011 and in 2011 its stock was one of the worst performers in the Boston area.
The challenges continued for the company that was founded out of MIT/Draper labs in 1985. In order to reduce costs Satcon laid off 140 employees (about 35 percent of its worldwide workforce) and closed its Canadian plant. And those cuts came just six months after the company cut 85 positions.
Satcon isn't the only casualty in the solar industry. Others have gone belly up. Abound Solar in Colorado received a $400 million loan from the U.S. government before it let go half of its staff, filed for bankruptcy and then suspended operations in 2012. We also watched as Evergreen Solar in Marlborough, Mass. went from being a company with promising technology, to being delisted by Nasdaq. And who can forget the Department of Energy-backed Solyndra LLC of Fremont, Calif. In September 2011 the designer and manufacturer of solar photovoltaic systems ceased operations, filed for Chapter 11 bankruptcy and laid off all of its employees.
What happened to the $535 million federal loan guarantee? Well, as you probably guessed, the government was expected to recoup 19 percent on the $142.8 million of the loan and zilch on the remaining $385, according to documents filed with the U.S. Bankruptcy Court, District of Delaware.
