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Evergreen Files For Chapter 11; State 'Clawback' Attempts Loom

Evergreen Solar has filed for Chapter 11 bankruptcy relief, hoping to reorganize its debt and continue as a smaller company. Here, its panels are seen on a rooftop near Rome.
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Evergreen Solar has filed for Chapter 11 bankruptcy relief, hoping to reorganize its debt and continue as a smaller company. Here, its panels are seen on a rooftop near Rome.

Seven months after it fired 800 employees, Evergreen Solar is filing for Chapter 11 bankruptcy relief. The company, which has received tens of millions of dollars in grants and incentives from the state of Massachusetts, will also face calls to return at least some of that money.

In the language of failed businesses, those calls are termed a "clawback" effort.

Discussing the bankruptcy at WBUR, reporter Curt Nickish says that Massachusetts will pursue the funds: "State officials say they were expecting bankruptcy, that they're going to move aggressively," he told WBUR host Deborah Becker, "and they say it will not prevent them from clawing back money."

But the state will be competing with Evergreen's creditors, who are owed $485.6 million, according to bankruptcy documents.

The company blames a slow U.S. economy, cheap Chinese labor costs, and a steep drop in solar panel prices as the reasons behind its current plight. For now, it has ceased making new solar panels as it prepares to reorganize itself into a viable enterprise.

Evergreen's strength, Nickish says, is "the technology it has to make silicon wafers cheaper." But its mistake was to attempt to assemble complete units in Massachusetts, he adds.

In 2008, the company made headlines for playing a central role in transforming the former Fort Devens Army base into an office park specializing in "green" businesses. Along the way, it has received $58 million in subsidies and tax breaks from Massachusetts, according to the International Business Times.

When the company announced massive layoffs in January, Tovia Smith reported on the fallout:

Even Democratic supporters, like state Sen. James Eldridge, whose district includes Fort Devens, where the plant is located, are now expressing morning-after regret.

"I admit I was mistaken," Eldridge says. "I learned my lesson." Perhaps the most important lesson, he says, is to "get a better prenup."

Now, the company faces a future in which it will likely become a specialty provider, if it survives at all. At WBUR, Nickish says:

It's definitely sad to look at the 130 or so people left at Evergreen and know that 65 are now losing their jobs. If Evergreen survives, it may be only as a small company based in Massachusetts with a proprietary technology to make wafers that it will produce at a highly automated and subsidized factory in China.

This is so different from the days of Digital Equipment Corp. and Wang, when not only great computers were imagined and designed in Massachusetts, we had thousands of people here making them, too.

Copyright 2021 NPR. To see more, visit https://www.npr.org.

Bill Chappell is a writer and editor on the News Desk in the heart of NPR's newsroom in Washington, D.C.
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