Our more regular California readers are probably familiar with previous posts mentioning the bankruptcy actions of several companies in the solar power industry. With the entire industry under a microscope, especially with the high-stakes presidential election looking to come in at a photo finish, it is no surprise that any action within the solar power world usually comes to the forefront of the news right away. However, beyond the effects of solar power on our nation's power grid and the elections in November, one recent Chapter 11 bankruptcy could have some impact on California companies.
Satcon Technology, a company that specialized in the production of solar inverters, recently filed for Chapter 11 bankruptcy in Delaware. In the company's Chapter 11 filing, assets were listed at $92.3 million against liabilities of approximately $121.9 million.
As many of the news reports on this recent bankruptcy will point out, the bankruptcy filing by Satcon Technology is one in a string of bankruptcy actions by solar power companies in recent years, headlined by the always newsworthy Solyndra. When a company files for Chapter 11 bankruptcy protection, like Satcon Technology did, the goal is usually to submit a plan to reorganize and streamline the company, as well as putting together a plan with creditors on the best course to repay the company's debts. All of this takes place while the company remains in operation, in an attempt to turn a profit.
However, some are predicting the Satcon Technology's bankruptcy filing could be part of a wider problem, in which the solar power industry could be looking at significant shrinkage over the next couple of years. This could be especially true if some companies look to consolidate operations with rivals. For now, Satcon's bankruptcy filing will proceed under the auspices of Chapter 11 protection, and hopefully the company will make a turnaround and come back as a profitable operation.
Source: Reuters, "Satcon Technology files for bankruptcy," Oct. 17, 2012