More than 800 workers who lost their jobs in mass layoffs in the days before Solyndra LLC went bankrupt — just two years after the company won a more than half-billion-dollar federal loan — have reached a settlement as the company’s bankruptcy grinds toward a close, according to newly filed court papers.
The deal would settle a class-action lawsuit filed on behalf of the former workers, who say the solar panel maker broke the law last summer by failing to give proper notice before mass layoffs just days before Solyndra filed for bankruptcy protection in U.S. Bankruptcy Court in Wilmington, Del.
The California-based company, which has been in bankruptcy court for nearly a year, didn’t admit in court papers filed in recent days that it had violated any labor laws, but said the settlement made sense because litigation could have been “protracted and expensive and the outcomes uncertain.”
If former employees won in court, they could have received up to $15 million plus attorneys’ fees. While the settlement deal delivers $3.5 million, the employees’ lawyers said any payment would take years and even then the company’s estates could be depleted through continued administrative and legal costs.
A year ago this month, Solyndra, the poster child for the White House’s economic stimulus plan, was working furiously behind the scenes to attract new investors by restructuring its government loan deal for a second time. After talks fell apart, Solyndra fired almost all of its roughly 850 employees but retained a handful of executives, filing for bankruptcy a week later.
In a joint statement filed in bankruptcy court, attorneys for the former employees and for Solyndra’s bankruptcy estate urged a judge to approve the deal, saying, among other things, that continued litigation would be costly and time consuming. Attorneys also submitted a list of at least 850 employees eligible to receive settlement money under seal.
In a separate motion, the attorneys said the employees’ names ought to remain confidential to protect their privacy. While most if not all of the employees’ names are already public in other bankruptcy filings, the attorneys said the settlement papers should keep employee information under seal. Attorneys said public disclosure of employee information “serves no useful purpose,” as the settlement papers contain all of the relevant information required to form an opinion about the deal.
The information the attorneys want to keep private includes employee names, addresses, pay rates and the pretax payment amounts they would receive under the settlement.
At times during the company’s nearly yearlong bankruptcy proceedings, attorneys for fired employees clashed with Solyndra attorneys. In February, when Solyndra sought permission to pay bonuses totaling up to a half-million dollars to a handful of key employees, the attorneys for the fired workers railed against the plan, which was approved anyway.
The settlement still requires approval from U.S. Bankruptcy Judge Mary Walrath, who is overseeing the case, and a vote by the former employees. A hearing on the settlement is scheduled for next month.
Meanwhile, even as the company’s bankruptcy case seems headed for a close, Solyndra isn’t likely to fade from the headlines anytime soon.
Republicans have used the company’s bankruptcy to attack President Obama’s economic stimulus plan. Mr. Obama’s Republican challenger, former Massachusetts Gov. Mitt Romney, called the Solyndra loan a symbol of “gross waste” while campaigning at the shuttered company’s plant in May. He called the government’s $535 million federal loan guarantee to the solar panel maker an example of Mr. Obama’s poor stewardship of a shaky economy.
Mr. Obama’s supporters have said the company’s loan was given on the merits and that Solyndra’s demise, due to increased competition from China, underscores the need for the U.S. to compete in the clean-energy market.
• Jim McElhatton can be reached at jmcelhatton@washingtontimes.com.
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