Federal officials hailed Solyndra LLC's plan to create clean energy when they awarded the company more than a half-billion dollars in loans, but the solar-panel maker's abrupt closure now threatens to leave behind an environmental mess.
The company plans on paying hundreds of thousands of dollars to clean up its own property in Fremont, Calif., but a separate leased property in nearby Milpitas sits vacant with barrels of unknown chemicals and lead-contaminated equipment, attorneys for the landlord, iStar CTL I L.P., said in recent bankruptcy court filings.
The full extent of the potential environmental problem at the leased Solyndra facility remains unclear. Officials at iStar say in court papers that they were not given the keys to the premises until this month, though Solyndra stopped making its lease payments in September when it filed for bankruptcy protection in Delaware.
"There may be environmental, health and safety issues and regulatory violations at the premises based on the materials the debtor has left behind, which consist, in part, of open containers of unidentified chemical waste and lead processing machinery," iStar attorney Karen Bifferato wrote in a recent court filing.
Photographs attached to the iStar court filing provide an inside look at Solyndra's stripped-down facility after the company hauled away whatever equipment might fetch money at auction.
In one picture, two large blue drums are filled with a black substance with no secure lids and covered instead with clear plastic wrap. Another photograph shows a yellow drum about the size of a large garbage can containing a yellow-brown gooey substance.
Yet another picture shows a large machine with a metallic tube coming from the top and another tube from the side. Both tubes display the words "lead exhaust." A smaller sign on the front of the machine says "toxic" next to what appears to be a small skull and crossbones. A large structure outside the facility has the words "Argon Refrigerated Liquid" on its side.
Court filings from the landlord also describe a high temperature oven assembly that is connected to an outside collection system, all of which are contaminated with lead.
"It is not yet known if the lead contaminated equipment at the iStar premises poses an imminent health problem, and since iStar only recently obtained access ... it is in the process of having the lead contamination investigated," the landlord stated in court papers.
At a bankruptcy hearing Wednesday, Ms. Bifferato said the landlord is worried that it will be stuck with "a big mess with potential environmental problems," including Environmental Protection Agency violations.
While Solyndra is paying to clean up its own property in Fremont in hopes of selling it, the company isn't setting aside enough money to clean up the leased property, Ms. Bifferato said. She argued that Solyndra should set aside funds in the bankruptcy to create an environmental remediation fund to cover the cleanup costs.
Solyndra attorneys disagreed, saying it's not unexpected that Solyndra would pay to clean up its own property because the sale will return money aimed at maximizing the value of the estate.
Solyndra has hired outside contractors to help remove scrap and clean up its own Fremont plant. In a motion to hire the vendors, attorneys for the company cited the need to dismantle, decontaminate and dispose of scrap metal, robotic enclosures and other equipment.
One company, Catalyst Environmental, will dispose of liquid chemical compounds, including cadmium sulfide, thiourea and hydrochloric acid, all of which were used to help make Solyndra's solar panels, according to court records.
Another contractor will get a base sum of about $140,000 for five weeks of work to provide mechanical demolition of various piping and sheet-metal connections to factory equipment.
The contractors are needed to prepare the Fremont property for "marketing and sale," Solyndra bankruptcy attorneys said in filings, adding that the company doesn't have enough employees to do the work on its own.
Most of Solyndra's employees were laid off last year. The company had employed about 1,100 people, but an earlier bankruptcy filing shows fewer than 100 remain.
To keep workers from leaving, the company this week won permission from U.S. Bankruptcy Court Judge Mary Walrath to pay out more than $300,000 in incentive bonuses to 20 key employees, mostly in the finance and engineering departments.
The company also won approval this week to hire Jones Lang LaSalle Inc. to help sell Solyndra's property.
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