Saab Cars North America has won court approval to implement its liquidation plan and pay back creditors.
On Monday, July 15th, Judge Christopher Sontchi, of U.S. Bankruptcy Court in Delaware, approved Saab Cars North America Inc plan to repay its creditors and some of the unsecured claims, at the same time wiping out equity holders. In 2012 Saab North America has been forced into bankruptcy by some of its US dealers, after Spyker entered liquidation proceedings in Sweden.
Saab was owned by GM, which sold the company to the Dutch automaker Spyker Cars NV in 2010, but unfortunately it could not keep Saab profitable as it faced is own liquidity issues. Saab North America’s liquidation plan implies repaying creditors, among which Ally Financial, the auto lender owned by the US government.
The unsecured claims, those which will arise from Saab’s abandonment of contracts and leases, are expected to earn between 25% and 82% recovery. So far unsecured claims total around $77 million, not including the contract rejection claims which are to be asserted by the automaker’s US dealers.
The creditors’ payback depends on ho large the claims will be and also on the success of the trust created under the plan to litigate against affiliates and creditors aimed at cutting the size of those claims against Saab’s estate.