Former Solyndra LLC employees want a judge to keep the company from handing out bonuses of up to $50,000 to 21 current supervisors and other employees.
Attorneys for Peter M. Kohlstadt, whose pending lawsuit says Solyndra broke labor laws when it laid off hundreds of workers without warning last year, argued in a separate court filing Monday that current employees slated to receive extra cash already are well paid — with all but five earning more than $100,000.
Former employees “are on the outside looking in … hands cupped around eyes, eyes pressed against the glass, they strain to see what is going on inside. But with this motion, the debtors have drawn the shades,” Mr. Kohlstadt’s attorneys wrote in a motion filed in U.S. Bankruptcy Court in Delaware.
The former employees’ attorneys also said several of those slated to get bonuses have already received “very substantial” raises.
Solyndra, which has fewer than 100 employees compared to 1,100 before it filed for bankruptcy last year, says it needs the bonus money because current employees are leaving for other jobs.
The company says the “key” employees, whom it has not identified by name, are needed to push forward a sale of the company. If the employees leave, Solyndra argued, they’ll have to be replaced by more expensive outside consultants, a proposition that would leave even less money for creditors.
Though not disclosed by name, the current employees who could receive the bonus money are not top executives or board directors, Solyndra attorneys have said.
“Within the last few months, the debtors have experienced a serious loss of personnel, which has made the continuation of the sales process in an orderly fashion more difficult,” Solyndra bankruptcy attorneys said in a court filing last week.
“The further loss of experienced personnel may seriously jeopardize the ongoing sales efforts and, should it continue, require the engagement of experienced consultants at a much higher cost than maintaining the existing personnel.”
The proposed bonus recipients include nine equipment engineers, six general business and finance employees and up to two information technology workers.
Solyndra went bankrupt last fall, two years after receiving a $535 million loan guarantee from the U.S. Department of Energy. It remains the focal point of a criminal investigation by the Justice Department and a nearly yearlong probe by the House Committee on Energy and Commerce.
The company’s bonus request drew sharp criticism from Rep. H. Morgan Griffith, Virginia Republican, who serves on the committee investigating Solyndra and who called the idea of bonuses “outrageous.”
“Bankruptcy and bonuses make for strange bedfellows, particularly when taxpayer money is involved,” Mr. Griffith said. “Many questions remain unanswered regarding the Solyndra debacle. However, there is no question in my mind that bonuses would be an inappropriate use of taxpayer assets.”
Mr. Griffith said he wanted the Obama administration to file papers in the bankruptcy case opposing the bonus plan. So far, only the former employees have filed opposition papers.
Bonuses were given before the company’s bankruptcy, too. Bankruptcy records filed shortly after the company filed for Chapter 11 reorganization detailed bonuses of up to $60,000 each awarded to senior executives at the company.
The bonuses, first reported by the San Jose Mercury News in November, included a $55,000 bonus to the company’s vice president of marketing, who was earning a base salary of $275,000; $60,000 to the company’s vice president of operations whose base salary was $300,000; and two $60,000 bonuses to the company’s chief financial officer, W.G. Stover. Mr. Stover cited his Fifth Amendment rights and declined to testify before Congress last year.
Bankruptcy law allows a trustee or debtor to recoup such payments to so-called corporate insiders if there’s evidence that the company was insolvent and yet continued to pay out bonuses.
Bankruptcy attorneys for Solyndra say the current employees who should receive bonuses aren’t corporate insiders but rather key employees needed to keep the company afloat while officials try to find a buyer.
Solyndra attorneys argued in recent court filings that the extra bonus money — ranging from 8 percent to 30 percent of the employees’ total base annual salaries — “will motivate the eligible employees to work as hard as possible” to achieve a Chapter 11 restructuring plan and sale.
The workers, often carrying a heavier load because of the layoffs, “are well aware that the clock is ticking on their employment,” the attorneys added.
Meanwhile, claims filed by former employees and contractors continue to pile up, including one for more than $140,000 filed by James F. Gibbons, a Stanford University professor who served on Solyndra’s board of directors.