Solyndra Auction Draws Huge Crowd

By MICHAEL KANELLOS
Assorted computers at the Solyndra bankruptcy auction in Fremont, Calif.Bloomberg NewsAssorted computers at the Solyndra bankruptcy auction in Fremont, Calif.

There’s nothing like a financial train wreck to draw a crowd.

This week’s auction for industrial assets, office equipment and company T-shirts owned by the failed solar manufacturer Solyndra, which we previewed in Tuesday’s Times, was wildly successful, according to Ross Dove, a managing partner at Heritage Global Partners, which conducted the two-day event.

“We had over 1,000 people at the factory and 2,500 online. We had people from Tunisia, Beijing, Shanghai,” he said.

“Usually, at an industrial auction you get 100, 200, 300 people. We haven’t had that many people since Enron,” Mr. Dove added, referring to the 2002 auction, also overseen by the Dove family, of that failed company’s assets.

And, like the Enron auction, the Solyndra sale drew its share of ghouls attracted to the garish spectacle as well as serious buyers seeking discounts on slightly used robots, spectrometers and other industrial equipment.

Solyndra T-shirts and polo shirts sold for $18 and up. A company banner went for $400.

“We sold a hard hat for $300 or $400,” Mr. Dove said. “We had bidding wars. We had items with 40 or 50 bidders. As auctioneers, we had a lot of fun.”

The highest-price single item was a scanning electron microscope that went for $270,000. (Before the auction, AQT Solar’s chief executive, Michael Bartholomeusz, told us that electron microscopes that retail for $600,000 to $1,000,000 can often be bought at auction for $250,000 to $750,000.)

The highest price fetched for a single lot of items was $1 million for a collection of spare Solyndra solar modules, according to Mr. Dove. Although Solyndra has been dogged by controversy and financial difficulties for years, it actually sold quite a lot of its products. The company shipped more than 500,000 modules over the last three years, and cumulative revenue since 2008 topped $250 million, according to bankruptcy documents.

Someone, clearly, wanted spare parts.

The circus atmosphere put a damper on the affair for some serious buyers, who attend these events in hopes of picking up nearly new equipment for pennies on the dollar.

“Most everything we wanted sold for twice to six times more than we would pay,” Terry Liu, a marketing manager for Quanta Laboratories, a testing and verification company in nearby Santa Clara, Calif., wrote in an e-mail.

Mr. Liu, who checked out copper tubing and environmental test chambers at an auction preview on  Monday, wound up getting only a humidity instrument in the auction. “I saw a Solyndra poster that was framed for $400 and a Samsung 55-inch TV go for around $1,000. We saw a tool chest sell for around $1,000.”

The auction brought in “multiple millions” of dollars, Mr. Dove said, declining to be more specific because of the bankruptcy proceedings. Solyndra’s liabilities stood at $749 million as of Jan. 1, so the results of the auction will put only a moderate dent in its debts.

Solyndra shut its doors and sent 1,100 full-time and temporary employees home on Aug. 31. It filed for Chapter 11 bankruptcy protection on Sept. 6.

Still, the federal government, which issued $528 million in loans to the company; private investors; and other creditors will have more opportunities to recover their losses.

Solyndra has not yet sold its intellectual property, its large Fremont, Calif., factory or a complete manufacturing line. It is trying to sell those assets, ideally intact, before a court hearing in its bankruptcy proceeding that isscheduled for Nov. 22.

These other assets could be a tough sell. Standard flat silicon solar module prices have plummeted in 2011, thanks to a surfeit of worldwide factory capacity, weak economic conditions and declining government subsidies. Solyndra modules cost about $2 a watt to produce, Shyam Mehta, senior analyst at GTM Research, told The Times in September.

At the time, Chinese crystalline solar module makers could produce conventional modules for $1.10 a watt. Now, bargain-basement modules can sell for 85 cents to $1.05 a watt.

Still, the remaining core of assets could find a home. The tubular shape of Solyndra’s modules, arguably, create a few novel advantages. Solyndra’s modules cost less to install and can withstand high winds better than conventional modules, according to the company. The tubes can also harvest power during sunrise and sunset more efficiently .

Additionally, the Internal Revenue Service allows owners of these types of solar arrays to get tax credits for new roofs because the roof plays an integral part in reflecting sunlight onto the tubes.

Large conglomerates like Samsung and LG have announced corporate goals to become dominant manufacturers in solar in a few years from a base that is close to zero. Solyndra’s ideas, in the hands of a well-financed mass manufacturer, could prove economical.

So even if you couldn’t tune into the auction this week, don’t worry. The drama will continue.

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