News that doesn't receive the necessary attention.

Thursday, July 10, 2014

Toledo solar panel maker Xunlight abruptly shuts down, can't make payroll-Toledo Blade

7/10/14, "Solar-panel maker shuts down," "Dozens out of work as Toledo’s Xunlight abruptly closes doors," Toledo Blade, Nolan Rosenkrans

"A Toledo solar-panel manufacturer has shut down and dozens of employees are out of work.

Xunlight Corp., a flexible solar-panel manufacturer that uses technology developed at the University of Toledo and is based on Nebraska Avenue, closed its doors June 30 to “resolve some matters,” CEO John Buckey said. Mr. Buckey declined to elaborate on the cause of the shutdown, but a letter provided to The Blade that appears to have been sent by Mr. Buckey to employees on July 2 said the company is closing and makes no reference to any potential reopening.

Unfortunately, payments that were committed to be paid to Xunlight contractually have not been sent as agreed, and the company does not have the funds necessary to meet its obligations, including this week’s payroll, and to continue its operations,” the letter states. “Furthermore, there are no prospects for obtaining additional funding.”

Calls to most phone numbers at Xunlight go straight to voice mail. 

There were three cars in its parking lot Tuesday, and there was no receptionist at the front desk or apparent signs of activity at the facility. Mr. Buckey estimated that the company employed about 40 people.

Xunlight’s connections to UT run deep.

The company was founded by Xunming Deng, a UT professor of physics, and his wife, Liwei Xu, based on technology he developed while at UT. He started a holding company called Midwest Optoelectronics LLC in 2002; the company’s main asset was an ownership stake in what would become Xunlight.

The holding company was licensed the technology by UT, and it then sublicensed the technology to Xunlight. Mr. Deng was chief executive officer and board chairman of Xunlight until March, 2012.

University of Toledo Innovation Enterprises received about $5 million of equity in 2008 from the University of Toledo Foundation; most of that equity was stock in the holding company. UTIE also made a $3 million investment in solar-panel maker Xunlight, according to UT records. It ultimately forgave $1 million of its investment, and received ownership of one of Xunlight’s manufacturing lines in exchange.

“We would certainly be disappointed if the company left Toledo for another region, but we remain optimistic that the UT technology licensed to Xunlight will continue to pay dividends in other applications in the near future,” Rhonda Wingfield, UTIE chief executive officer, said in a statement.

When asked if UT believed Xunlight planned to move its operations outside of Toledo, a university spokesman said only that “we would certainly be disappointed if it did.”

Mr. Deng did not return a call requesting comment.

Some investors in Xunlight and MWOE knew little of the closure until asked about it by The Blade. Bob Savage, Jr., of Rocket Ventures said Xunlight representatives had been hard to reach in recent weeks, but that he did not believe the company was dead. Rocket Ventures is a venture capital fund run by the Toledo Regional Growth Partnership; it previously was jointly run with the university.

Bo Lee, a Colorado-based investor in MWOE, said a shutdown didn’t surprise him. Mr. Lee filed a lawsuit earlier this year claiming Mr. Deng defrauded investors when he negotiated a financial restructuring and the sale of some assets to his own benefit and to the detriment of one of the companies.

Starting in 2011, according to the lawsuit, Xunlight began negotiations with MWOE to reduce its ownership stake in Xunlight in exchange for a cash infusion by investors to stave off bankruptcy. Xunlight also planned to divest itself of its Asian operations that were in China.

Xunlight Asia, Mr. Lee claims, was supposed to be sold to Midwest as part of its compensation for reducing its ownership stake in Xunlight. Mr. Lee claims Xunlight instead sold its Asian operation at a lower price to XL Technology Holdings, a British Virgin Islands company Mr. Deng owned.

Meanwhile, MWOE reduced its ownership stake in Xunlight from 51 percent to less than 7 percent.

At the time of the negotiations, Mr. Deng was chairman and CEO of MWOE and Xunlight Asia, and was thus in a position to influence the negotiations, according to the lawsuit. He has denied Mr. Lee’s claims.

With Xunlight potentially out of business in the United States, Mr. Deng would be able to fill the market void, and with much lower operational costs, Mr. Lee said.

“If Xunlight U.S. goes away, [Deng] is free, and the cost from manufacturing in [China] is much less,” Mr. Lee said. “He can probably buy the assets here at a deep discount, because no one else will have a use for it.”" via Lucianne


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