WILMINGTON, Del. -- Lawyers met here yesterday to discuss what becomes of Solyndra's remaining assets -- and, by extension, how much the government can recover.

In a hearing at a bankruptcy court yesterday, the major issues were these: How soon should Solyndra sell off its factory, patents and other items of value? And what approach maximizes the payoff for the Department of Energy, investors and the other parties to which Solyndra owes money?

Federal bankruptcy Judge Mary Walrath approved Solyndra's request to borrow $4 million to wind itself down. She also decided to give Solyndra until Oct. 25 to line up bidders, with the formal auction of assets on Oct. 28.

That relatively speedy schedule fits well with the federal government's wishes. A lawyer for the Department of Justice, which is representing DOE, called the situation a "melting ice cube" because Solyndra is so weak, it may soon lack the money even to sell itself off.

Matthew Troy of DOJ said Solyndra's bankruptcy plan depends, in part, on selling its inventory of solar panels. But these panels couldn't keep the company alive in the marketplace, he said, so there's no certainty that Solyndra can deliver on anything beyond a short-term plan.

Another uncertainty: Who wants Solyndra's remains? The company is hoping to sell its assets on a "turnkey" basis: that is, as a complete manufacturing operation that's ready to go.

But the global solar market punished Solyndra's product, and it may be turning away from thin-film technology in general. Moreover, analysts say, certain parts of Solyndra's technology are highly customized, so some of its equipment may not be useful to others.

Nevertheless, some in the Delaware courtroom argued that Solyndra is rushing the process and potentially leaving money on the table.

Creditors want more time, $40M

Bonnie Glanz Fatell, the lawyer for a group of creditors that say Solyndra owes them roughly $40 million, said four weeks is not enough time. She said Solyndra's technology is new, its factory complex, and its relationships with vendors many.

No bidder could do the research, get the financing and negotiate a buying agreement by late October, she said.

Fatell said Solyndra is trying to vacate its factory by December, to avoid paying some $800,000 in rent for that month. She asked the company's financial adviser if it has tried to get a discount so it can stay in the building.

The adviser, Eric Carlson of Imperial Capital, said he wasn't aware of any such effort.

Fatell asked Carlson, on the stand, if he was aware of a solar power conference in Dallas next month -- a conference where Solyndra has exhibited before and where more buyers might be found.

Early conversations with prospective buyers

Carlson said he wasn't aware of the conference, but "for the most part, we've blanketed the universe of people that could possibly be interested in this asset sale."

Imperial is in charge of finding prospective buyers; so far, it claims to have contacted more than 130 of them and received nondisclosure agreements from 12.

Carlson said in general, more time is better, but in this case, Solyndra has little cash to go on, and it's already begun conversations with some companies -- even before it declared bankruptcy.

He said if the October auction doesn't draw sufficient interest, Solyndra will have the option to try another approach.

Walrath supported Solyndra's plan in general, but she ordered it to send a representative to the Dallas solar conference just in case.