The United States Bankruptcy Court in Delaware has approved a plan by Saab Cars North America Inc. to liquidate its assets and repay its creditors. Judge Christopher Sontchi has signed off the plan of the company to repay all secured creditors and some portion of unsecured claims, while wiping out equity holders.
The approval effectively ends the bankruptcy of the US unit of Swedish carmaker Saab Automobile AB. Several of the unit’s dealers in the US forced it into bankruptcy in 2012 after Saab Automobile entered liquidation proceedings in Sweden.
General Motors Co. sold Saab Automobile to Dutch carmaker Spyker Cars NV in 2010. The Dutch company, however, also had its own liquidity problems and was not able to keep Saab profitable. According to court papers, Saab North America's liquidation plan entails giving full payout to secured creditors, including government-owned Ally Financial.
Unsecured creditors are set to recover only between 25 percent and 82 percent of their claims, which totals around $77 million so far. The amount, however, does not include contract rejection claims that could be asserted by Saab's dealers in the US.
Saab said in court papers that the ultimate payback percentage to unsecured creditors will depend in part on how large those claims would turn out as well as on the how successful was a planned trust in litigating against creditors and affiliates. Saab hopes the litigation would result in trimming the claims of creditors and affiliates on its estate. [source: Reuters]