Spyker files £3bn legal action against GM over Saab bankruptcy

07/08/2012 in News, Market Insight

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Spyker has filed a £3 billion legal action against General Motors after accusing the company of intentionally pushing Saab into bankruptcy by blocking a sale to Chinese investor Youngman.

Saab was declared bankrupt on December 19, 2011 and Spyker believes GM blocked the sale to avoid competition with Saab in the Chinese market.

Spyker’s statement said: “The transaction between Saab Automobile, Spyker and Chinese investor Youngman would have permitted Saab Automobile to restructure and remain a solvent, going concern.”

Victor R. Muller, Spyker's chief executive officer, believes GM’s actions were “unlawful”.

Muller said: “Ever since we were forced to file for Saab Automobile's bankruptcy in December of last year, we have worked relentlessly on the preparation for this lawsuit which seeks to compensate Spyker and Saab for the massive damages we have incurred as a result of GM's actions.

“We owe it to our stakeholders and ourselves that justice is done and we will pursue this lawsuit with the same tenacity and perseverance that we had when we tirelessly worked to save Saab Automobile, until GM destroyed those efforts and deliberately drove Saab Automobile into bankruptcy.”

GM told the BBC the allegations are "baseless".

GM said: "We have reviewed the complaint, and it is completely without merit.

“We will vigorously defend the company."

Since Saab is in receivership and incapable to contribute to the costs of litigation, Spyker and Saab Automobile have entered into an agreement which will see Spyker bear the costs of litigation in exchange for a “very substantial share” of Saab if the proceedings are successful.

Muller said Spyker has secured the financial backing required to see the lawsuit through to the end from a third party investor, but will not reveal who the investor is.

Saab's assets were sold to National Electric Vehicle Sweden (NEVS) in June this year which aims to turn the business into a maker of electric vehicles.

While the assets were sold, Muller and Spyker still own the rights to the legal entity Saab, which is why they are filing this lawsuit.

NEVS has not yet secured the rights to the Saab brand name.

Saab GB

Following the demise of Saab - falling into bankruptcy at the of 2011 - the name continues here as Saab Automobile Parts UK, formed from the British arm of the business and a network of around 80 authorised repairers aiming to offer cover for "90% of what was the original manufacturer's warranty".

From March 2013 it also started promoting the sale of used Saabs after its used car locator helped generate 1,000 unit sales in 2012.

Saab GB's managing director heads up a team of 16 at the new company.

In September 2011 Saab Automobile won an appeal in a Swedish court to get the go-ahead for bankruptcy protection proceedings in the hope that this will give it time to secure a deal with Chinese investors.

A month later the carmaker secured a second round of funding, of £44.6 million, from US private equity firm North Street Capital to contribute to restructuring. Saab subsequently terminated its Chinese funding agreements.

On November 2011 administrators from Grant Thornton were appointed to Saab Great Britain, the UK's national sales company for the Swedish brand.

The company entered a voluntary administration following months of suspended production and tight liquidity at its global parent, Saab Automobile AB.

In the meantime, sales stalled. And in October 2012 Saab's dealer council disbanded, donating the balance of funds to sector charity BEN.