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In Bankruptcy Era, Solar Innovation Goes on Auction

(Solar auction market story, updated for Evergreen Solar sale date, and to correct name of Hilco Industrial). NEW YORK (TheStreet) -- Ross Dove's family has been in the business of finding a home for bankrupt companies dating back to the Great Depression. In fact, it was the bankruptcy of a car dealership owned by Dove's grandfather that led the family into the auction business in the first place. Dove's grandfather owned an Auburn Cord (an early competitor to GM and Ford) car dealership, and when Auburn Cord went bankrupt (Depression-era buyers couldn't afford the cars) the car dealership of Dove's grandfather went bankrupt, too.

"It was around the end of the Great Depression. They brought in an auctioneer. Since my grandfather was out of work, the auctioneer hired him to help auction the dealership and my grandfather said, 'This is not such a bad business,'" as Dove recalls.

Robert Levy, Hilco Industrial managing partner, calling another auction

It's a long way from cars that competed with the Model T to solar panels, but today, Dove, managing partner of global auction and advisory firm Heritage Global Partners, finds himself one of the major players in a cottage industry: the bankruptcy auction of solar companies.

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The solar sector has bottomed out. Companies are scaling back manufacturing plants, if not shutting them down, and in some cases entering liquidation. Investors agonize over solar stocks that that have gone from being bought with two kinds of green dreams to leaving a green, nauseous feeling. Yet one niche within the solar sector is thriving: Dove and his main peer and rival Robert Levy, of Hilco Industrial, expect in the coming months a pipeline of at least a dozen solar restructurings to hit the auction circuit.

Solar Scavengers
"I'm kind of like a market maker in this sector, and it's a good time to be an auctioneer," Dove says. In fact, the old joke about the funeral business never having a bad year could apply to the corporate bankruptcy auctioneers. There task here, though, is uncharted territory. Dove says the auction business most recently cycled out of a mega-auto industry restructuring period, and given his grandfather's history, that was in keeping with the the typical death certificates signed for American industry. With solar now in the court of the corporate bankruptcy auctioneers, though, a new approach to revaluing companies needs to be devised as innovation meets its undertaker.

Says Hilco's Levy, "When there is rush to invest, think of the internet back in 2000, there will be mistakes and overcapacity and those who invest a significant amount of money in capital and resources into good and bad ideas. Some people do a little of both."

In March 2010, BP Solar announced that it was shuttering its U.S. plant located in Maryland. In retrospect, BP's (BP) move was the canary in the coal mine, and it took a year-and-a-half from that event to the trio of bankruptcies that put solar bankruptcies on the map in a big way. Dove was involved in the BP auction.

Spectrawatt, a small Intel (INTC)-funded solar manufacturer had its equipment auctioned off to China's Canadian Solar (CSIQ) last month, an auction handled by Dove.

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