Solyndra LLC, a solar panel maker that received $535 million in federal loan guarantees, filed for bankruptcy, the third U.S. solar firm to succumb to pressure from Chinese rivals in recent weeks.

Solyndra, which also received more than $700 million in venture capital funding, said it will try to find a buyer quickly to avoid a firesale liquidation.

The solar industry has been in turmoil this year as a glut of panels has sent prices plummeting 25 percent. Manufacturing capacity expanded just as government austerity measures in Europe eliminated subsidies and undercut demand.

Solyndra cut prices to try to compete but said in court papers that it was unable to match the extended payment terms offered by foreign competitors.

Last week the Fremont, California-based company said it had suspended operations and laid off 1,100 workers.

Solyndra's bankruptcy filing on Tuesday follows similar filings by former Wall Street high flyer Evergreen Solar Inc and SpectraWatt Inc, a private company that was backed by Intel Corp.

Even industry heavyweights such as China's Suntech Power Holdings Co Ltd and U.S.-based First Solar Inc are struggling with dwindling profits, while small, up-and-coming solar companies are finding it increasingly difficult to stay afloat.

Solyndra said in documents filed in Delaware's bankruptcy court that it plans to spend the next four weeks trying to drum up interest among potential U.S. and foreign buyers to avoid shutting down permanently and selling its assets piecemeal to repay its creditors.

If it finds a buyer, could lead the rehiring of some of its laid off workers. One of those workers filed a class action lawsuit against the company in the bankruptcy court for violating the federal WARN Act, which requires larger companies to give 60 days advance notice of layoffs.

The company did not return a call for comment.

The company was founded in 2005 to commercialize its light-weight panels, which are made up of cylinders rather than conventional flat panels. Solyndra was touted by MIT Technology Review as one of the 50 most innovative companies in the world and was visited last year by President Barack Obama.

Solyndra raised more than $700 million by selling preferred shares to venture capitalists, including Argonaut Ventures LLC of San Francisco, which owns about 39 percent of the company. Argonaut is also among the company's first-lien lenders, meaning it will be the first to be repaid, ahead of the U.S. government.

The company has secured debts of $783.8 million, according to court documents.

Other venture backers include Madrone Partners, USVP Venture Partners and Rockport Capital Partners, according to court documents.

Argonaut and Madrone plan to provide Solyndra with $4 million in debtor-in-possession financing, at 15 percent interest, to get the company through its four-week search for a buyer, according to court documents.

The company must pay off the $4 million bankruptcy loan as well as the $69.3 million owed to the first-lien lenders before it begins to repay the government-guaranteed loan from the U.S. Federal Financing Bank, a unit of the U.S. Treasury.

The case is Solyndra LLC, Case No. 11-12799, U.S. Bankruptcy Court, District of Delaware.

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