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Note 6 - Deconsolidation of SGT

12 Months Ended

Dec. 31, 2013

6. Deconsolidation of Solar Green Technology

In November 2013, the board of directors of SGT approved a voluntary plan for liquidation. On December 30, 2013, the board of directors of SGT appointed a liquidator. Under Italian regulations, the liquidation process is controlled and carried out by the liquidator and the Company has no ability to exercise influence over SGT. As a result of these actions, the Company deconsolidated SGT on December 30, 2013 when the Company ceased to have a controlling financial interest in SGT. The Company recognized a gain on deconsolidation of $3.5 million which was recognized in other income in the statement of operations as the liquidation is a run-off of operations. Additionally, the Company deconsolidated net liabilities owned by SGT to LDK of $2.0 million. As LDK is the Company’s parent company, this portion of the deconsolidation was treated as debt forgiveness and a capital transaction recorded as an increase to additional paid in capital.

The Components of the gain on deconsolidation are as follows (in thousands):

Adjust SGT’s negative net assets to zero	$	6,127
Reclassify net liabilities forgiven by LDK to additional paid in capital		(1,980	)
Write-off of advance to SGT		(438	)
Reclassify cumulative foreign currency translation to the statement of operations		(172	)
Gain on deconsolidation	$	3,537

The fair value of the Company’s retained investment in SGT is zero at December 31, 2013. SGT will remain a related party of the Company.