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Saab dealers threatened with litigation over debt recovery

Saab dealers are being threatened with litigation from administrators if they do not meet a 14 day debt recovery deadline.

Motor Industry Legal Services (MILS), the car dealer specialist solicitor and legal advisor for the Retail Motor Industry Federation, is advising “over 25%” of the Saab dealer network in the UK and has described the approach from administrators as becoming “increasingly heavy handed in their efforts to extract money from Saab franchisees”.

The 14 day period does not give dealers a huge amount of time to seek legal advice to tackle the claims.

MILS is currently providing legal defence for Saab dealers against the claims, particularly where there is a mutual accounting procedure between Saab GB and the franchisee.

Adam Cox, managing director of MILS, said: "In such cases, the dealer may be able to offset money owed to them by Saab GB against money owed by the manufacturer.

"This same argument can be used in relation to debts such as liabilities for the manufacturer’s warranty.

"There also appears to be a serious issue regarding vehicles purchased on a sale or return basis from Saab GB.

"In some cases, Saab are delaying payment or refusing to buy back these vehicles in the last few months of trading. In such circumstances, franchisees may be able to claim for the difference between the return value and that realised by the vehicle at sale, and still claim the bonus achieved."

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