When Saab finally collapsed in December last year, due to a failed last-minute rescue bid headed by China’s Zhejiang Youngman Lotus Automobile Group, being blocked by General Motors, the Swedish government seized control of the automaker’s assets. When that happened Saab’s North American operations were taken over by McTevia and Associates, which was given day-to-day control.
A liquidation plan from McTevia, studied by a number of dealers, was seen to result in a fairly messy legal outcome with multiple suits resulting, thus on January 30, some 41 dealers asked a U.S. Bankruptcy court to place Saab’s North American operations into Chapter 11, believing it was in their best interests.
The Chapter 11 filing gives Saab North America a chance to liquidate its assets under direct supervision of both the court and its dealers, minimizing the costs associated with getting rid of the assets. The alternative would have been a Chapter 7 filing, indeed one was original proposed by a number of dealers, though in that case a trustee would have been appointed to oversee the liquidation and the costs incurred would have been greater, since in these cases, the trustee normally receives commissions and would have to hire an additional counsel not privy to inside information of Saab’s operations.
The Swedish government is looking to offload Saab’s remaining assets collectively and is currently studying potential bids (including one by Youngman).
