Solyndra: $1.2 bln in contracts undercut by China
* Company has 25 potential biddersBy Tom HalsWILMINGTON, Del., Oct 18 (Reuters) - Executives from
bankrupt Solyndra LLC testified on Tuesday that a flood of
cheap Chinese solar panels kept it from realizing $1.2 billion
in contracts it announced in 2008.Three years after Solyndra announced those long-term
contracts, its cumulative sales total a mere $330 million,
company executives said in a meeting with creditors.The company filed for bankruptcy in early September and
days later was raided by the Federal Bureau of Investigation.
Solyndra has become an embarrassment for the Obama
administration, which provided it a $535 million government
loan that now seems unlikely to be repaid in full.When the company announced the long-term contracts in 2008,
solar panel prices were higher and developers of solar projects
were scrambling for supply. As a result, three companies
committed to three-year or five-year contracts that were touted
in the 2008 press release, according to Ben Bierman, the
company’s vice president of operations.However, the solar panel market soon changed. China began
pouring billions of dollars of subsidies into panel
manufacturing, driving prices much lower. A dearth of supply
soon became a global glut.At the same time, cash-strapped European countries cut
incentives for installing solar power projects. As a result,
none of the three companies have placed significant orders
under their contracts with Solyndra this year, Bierman said.In a meeting with the Department of Justice last month,
company representatives refused to discuss the contracts.That refusal prompted the government to push the bankruptcy
court to replace management and the board of directors with a
trustee. The court denied that request on Monday.Tuesday’s meeting with creditors was required under the
bankruptcy code. Officials from the Department of Justice
conducted the meeting and Solyndra executives answered
questions under oath about their operations, assets and
liabilities.The company’s financial adviser said Solyndra had received
active interest from 25 potential buyers for all or parts of
its operations. Eric Carlson, of Imperial Capital LLC, said 14
would be considered strategic buyers, the rest financial
buyers.However, no party has committed to act as an initial or
“stalking horse” bidder. Bids are due in mid-November.The bankruptcy case is In re Solyndra LLC, U.S. Bankruptcy
Court, District of Delaware, No. 11-12799
Anonymous jury seated in murder trial of former prosecutor
During pretrial proceedings, prosecutors argued that safety and privacy concerns demanded that potential jurors remain anonymous. At a hearing on August 30, U.S. District Judge William Martini agreed to withhold jurors’ names and the names of their employers, although he did not say how long the information would remain confidential.In an typical criminal trial, attorneys learn the names, addresses, workplaces and other personal information about the prospective jurors from whom they select their jury.But there’s nothing typical about the trial that opened on Monday in Newark federal court, where the lawyers will know nothing about the jurors other than their hometowns and a few other small details gleaned from their answers to an extensive questionnaire.In New Jersey federal courts, which includes courthouses in Newark, Trenton and Camden, anonymous juries are created about six times per year on average, said Bill Holland, director of court services for the U.S. District Court for the District of New Jersey.Bergrin, who is representing himself with assistance from a court-appointed attorney, Lawrence Lustberg, has already been severely restricted in his physical movements around the courtroom. He has been ordered to remain within a zone that measures just a few square feet and keeps him away from the jury and the witness box. If he steps outside the proscribed zone, the judge has warned, he will be ordered to wear an electric shock monitoring ankle bracelet that will enforce those restrictions.Bergrin is accused of arranging the 2004 shooting in broad daylight on a Newark street of a crack cocaine buyer named Kemo McCray, a witness who was to testify against one of Bergrin’s clients, a drug kingpin.The murder charges against Bergrin, are part of a larger 33-count indictment filled with racketeering and other allegations that government officials have said make Bergrin “no different than a street gangster,” according to a press release the U.S. Attorney’s Office in the District of New Jersey issued after his indictment in May 2009. Martini decided to try the murder counts separately to avoid the risk of prejudice.If convicted, Bergrin faces up to life in prison.Bergrin’s co-defendants, including another New Jersey lawyer, Thomas Moran, have already pleaded guilty.
US STOCKS-Wall St eyes 2nd week of gains on euro hopes, data
NEW YORK Oct 14 (Reuters) - U.S. stocks rose on Friday as
better-than-expected retail sales further relieved fears of
another recession while optimism kept growing that the euro
zone was making progress on a solution to its debt crisis.Tech shares rallied after a blowout quarter from Google
Inc , putting the S&P 500 on track for back-to-back
weekly gains for the first time since early July.French and German officials are trying to put flesh on the
bones of a crisis resolution plan in time for a European Union
summit on Oct. 23, overshadowing Standard and Poor’s cut of
Spain’s credit rating, a move that underlined the challenges
facing Europe’s finance ministers.Adding to the positive tone, U.S. Commerce Department data
showed September retail sales rose 1.1 percent from a month
earlier, beating the median forecast in a Reuters poll for a
0.7 percent rise. Sales growth during August was revised
upward to 0.3 percent.”People are growing more hopeful that European
policy-makers are going to announce a comprehensive plan, and
the retail sales data was the latest in a number of datapoints
that have caused people to lessen their worries about an
imminent recession,” said Nick Sargen, chief investment
officer at Fort Washington Investment Advisors in Cincinnati.The Dow Jones industrial average gained 70.16
points, or 0.61 percent, to 11,548.29. The Standard & Poor’s
500 Index added 9.88 points, or 0.82 percent, to
1,213.54. The Nasdaq Composite Index rose 19.80
points, or 0.76 percent, to 2,640.03The recent rally since the S&P 500 briefly hit bear market
territory on an intraday basis on Oct. 4 has pushed the
benchmark index near 1,220, a key resistance point it’s been
unable to cross since early August.”We’re definitely showing signs of stabilizing, but if the
plan from Europe is a disappointment, we’ll probably retest
our lows,” said Sargen, who helps oversee $38 billion in
assets under management.Google Inc led the Nasdaq higher as shares jumped
5.9 percent to $591.78 after its results late on Thursday blew
past Wall Street’s expectations, helped by strong advertising
sales and deft cost controls.Apple Inc rose 1.8 percent to $415.90 as the
newest version of its iPhone went on sale across the country.On the downside, Mattel Inc fell 1.5 percent to
$27.36 as higher costs hurt its margins in the third quarter.Consumers remained pessimistic, despite the growth in
retail spending. The Thomson Michigan’s
preliminary October reading on consumer sentiment slipped to
57.5 from 59.4 the month before. It fell short of the median
forecast of 60.2 among economists polled by Reuters.The Labor Department said overall import prices increased
0.3 percent, after falling 0.2 percent in August. Economists
polled by Thomson Reuters had expected prices to drop 0.3
percent last month.
Rajaratnam gets 11-year sentence
Thursday’s sentencing caps a prosecution, marked by secret wiretaps of Rajaratnam and his associates, that shocked the investment world. The Sri Lanka-born fund manager once stood atop a $7 billion New York hedge fund, but was found guilty of running a network of informants who supplied him with corporate secrets.The sentence was lighter than the 19-1/2 year minimum term that prosecutors had sought, and was only slightly more than the 10 years handed down recently to a former Rajaratnam employee at the now-shuttered Galleon Group hedge fund.The judge, in rejecting calls for a tougher sentence, said Rajaratnam, 54, faces “imminent kidney failure” due to advanced diabetes. He referred to a report from the defense describing Rajaratnam’s doctors as recommending dialysis soon. The report said the doctors had begun the process for obtaining a kidney transplant.”Prison creates a more intense form of punishment for critically ill prisoners,” U.S. District Judge Richard Holwell said. He added, however, that illness does not provide “a get-out-of-jail-free card.”The judge also cited the multimillionaire’s charitable work including helping victims of natural disasters in Sri Lanka, Pakistan and in the United States.Rajaratnam, standing with his lawyers and looking straight ahead, was expressionless after hearing the sentence. Before the judge announced his ruling, Rajaratnam said “No thank you, Your Honor,” when asked if he wanted to make a statement.Rajaratnam’s lawyers, whose client showed no obvious signs of poor health during the 80-minute hearing on Thursday, have said that a long prison term would amount to a death sentence.MADOFF’S PRISON RECOMMENDEDThe judge granted Rajaratnam’s request to recommend he be sent to a prison in Butner, North Carolina, best known for housing Ponzi scheme operator Bernard Madoff, who is serving a life term. The prison, whose inmates range from white-collar offenders to child molesters and gang members, has a hospital.Rajaratnam was the key figure of a sprawling criminal case, unveiled in October 2009, that touched some of America’s top companies, including Goldman Sachs Group Inc (GS.N), Intel Corp (INTC.O), IBM (IBM.N) and the elite McKinsey & Co consultancy.Prosecutors have placed him in a dubious pantheon of Wall Street power players such as takeover specialist Ivan Boesky and junk bond financier Michael Milken, principal figures in a mid-1980s insider-trading case. Both men served about two years in prison.Rajaratnam’s actions were “brazen, pervasive and egregious,” Assistant U.S. Attorney Reed Brodsky said in court on Thursday, urging for the maximum punishment.Holwell also decried Rajaratnam’s offenses, saying “the government is absolutely correct that insider trading is an assault on the free markets that are a fundamental element of our democratic society.”Rajaratnam was ordered to surrender on November 28. The judge rejected his request to remain under house arrest at his luxury Manhattan apartment while he pursues an appeal over the legality of the wiretaps.Federal inmates typically must serve at least 85 percent of their terms before being eligible for release.Rajaratnam’s wife, Asha, who has never attended court in the two years since his arrest, sat in the third row of the courtroom’s public seats while the judge imposed sentence.Rajaratnam was convicted in May on 14 charges of securities fraud and conspiracy. He did not testify in his own defense at his two-month trial, but his voice was heard repeatedly on the 45 recorded phone calls played for the jury.The judge also fined him $10 million and ordered him to forfeit $53.8 million, which Holwell said approximated the illegal profits and avoided losses from the trading scheme.The Galleon case sent shock waves through Wall Street and the hedge fund industry, where traders can try to get an edge at all costs. Prosecutors say Rajaratnam and others crossed the line by pumping corporate insiders for corporate earnings or details of mergers that had not yet been announced.The investigation featured extensive use of secret FBI phone taps. Such tactics usually are reserved for Mafia and drug trafficking investigations.The case has been a major victory for the Justice Department. Out of 26 people, including traders, lawyers, executives and consultants charged in the case, 25 have pleaded guilty or were convicted at trial of supplying or trading on illicit stock tips. One is at large.”We can only hope that this case will be the wake-up call we said it should be when Mr. Rajaratnam was arrested,” Manhattan U.S. Attorney Preet Bharara said in a statement.One conspirator caught on the phone taps was Danielle Chiesi, a former high school beauty queen who became a hedge fund trader at New Castle Funds.”They’re gonna guide down,” Chiesi told Rajaratnam on a July 24, 2008 recording of them discussing Akamai Technologies Inc’s (AKAM.O) full-year outlook. “I just got a call from my guy. I played him like a finely tuned piano.”At the trial, several of Rajaratnam’s former friends and associates, including former McKinsey consultant Anil Kumar and former Intel executive Rajiv Goel, testified against him.Goldman Chief Executive Lloyd Blankfein also testified that disclosure of boardroom talks to Rajaratnam by a Goldman board member went against the bank’s confidentiality policies.Insider-trading defendants often get sentences lower than what is prescribed in federal guidelines, out of the view that their crime is less harmful than other types of misdeeds.Judges have handed down some tough insider-trading sentences recently. A former Galleon employee, stock trader Zvi Goffer, 34, was sentenced last month to 10 years in prison. In a 2008 case, former Credit Suisse investment banker Hafiz Naseem also was sentenced to 10 years.Rajaratnam drew only a slightly longer term.”I think it’s a fair sentence,” said Thomas Dewey, a defense attorney at law firm Dewey Pegno & Kramarsky. The judge “balanced the seriousness of the crime and the need for deterrence with his medical issues and the good works Raj has done to come out at the right place.”Rajaratnam founded Galleon in 1997 and built it into one of the world’s largest hedge funds. Galleon made all of its investors whole when it was wound down after his arrest.
