Saab denied bankruptcy protection

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STOCKHOLM — Troubled automaker Saab, known for its quirky, rounded cars, moved closer to financial collapse Thursday after a Swedish court rejected its request for bankruptcy protection.

The ruling by the Vanersborg District Court means the Swedish brand, which has struggled financially since General Motors Co. sold it to Netherlands-based Spyker Cars in 2010, is now only days away from facing bankruptcy action from trade unions. Spyker has since changed names to Swedish Automobile.

The company has struggled to pay suppliers and staff, and production at its manufacturing plant in Trollhattan, Sweden, has been suspended for most of the year.

Swedish Automobile said it would appeal the court's decision before the deadline on Sept. 29.

However, it is unclear whether the appeals court will accept the request and the unions representing Saab's 3,700 employees said they would take bankruptcy action within days on behalf of members still waiting for their August salaries.

Bankruptcy protection in Sweden is similar to Chapter 11 in the United States, allowing a company to reorganize, buying it time to improve its finances and stave off liquidation. During that period the Swedish government pays employees' salaries. That government salary guarantee also kicks in if a company is declared bankrupt.

Swedish Automobile had submitted an application for bankruptcy protection on Wednesday, including plans for a reorganization it claimed would help revitalize the brand.

But the court said it remains unclear how Saab — which underwent a reorganization under GM in 2009 — will find the money it needs to stay afloat.

Swedish Automobile's Dutch CEO, Victor Muller, is hoping for a €245 million ($344 million) cash injection from Chinese investors Zhejiang Youngman Lotus Automobile Co. and Pang Da Automobile Trade Co. that is currently awaiting regulatory approval.

"It appears unclear if — and if so when — the relevant Chinese authorities will approve the agreements," the court said, adding that other financial solutions presented by the company don't seem sustainable.

"In sum, the court finds that it appears unclear how the company will be able to solve the liquidity crisis and continue operations," the ruling said.

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Saab said in a statement it was "disappointed" and would appeal the decision and update the market "on further developments" Friday. It gave no details.

Hakan Skott, local club chairman of labor union IF Metall in Trollhattan, called the court's decision "sad" and said union members will consider filing bankruptcy proceedings against Saab within "the next couple of days."

"We are nearing 14 days without salary payments and the financial situation is becoming very difficult for some of our members," Skott said.

Unionen, a labor organization for white-collar workers, said it would wait no more than three days before filing a bankruptcy petition for Saab — if the company doesn't do it before then.

"It is our opinion that an employer that ends up in a situation like this should put itself into bankruptcy," said Martin Wastfelt, the union's chief legal advisor.

Tom Muller, an analyst at Theodoor Gilissen in Amsterdam, said he believes the unions can wait a maximum of two to three days before making a bankruptcy filing.

"The company can do only one thing and that is to give them money," said Muller, who is not related to the Swedish Automobile chief executive. "The members have to eat. ... People cannot live on promises."

He said he doesn't believe Swedish Automobile will manage to find the funds in time.

"It's a good car, there is nothing wrong with the product, but it's the financial situation that's the problem," he said.

Copyright 2011 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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Saab denied protection

STOCKHOLM-troubled automaker Saab, known for his quirky, rounded cars moved its request for bankruptcy protection closer to financial collapse Thursday after a Swedish court rejected.

The judgment of Rattvik District Court means that the Swedish brand, which has struggled financially, because General Motors co., Netherlands-based Spyker sold cars in 2010, now only days before the bankruptcy action of trade unions before. Spyker has since changed name to Swedish car.

The company has fought Sweden, most of the year was interrupted for the suppliers and employees, and production in its plant in Trollhattan, to pay.

Swedish automobile said that it the decision of the Court before the deadline to Sept. 29 would appeal.

It is unclear whether the Court of Appeal accepted represented 3,700 employees said the request and the unions Saab, that they within bankruptcy days for members still awaiting their August salaries would be.

Bankruptcy protection in Sweden is similar to Chapter 11 in the United States, allowing a society, reorganize time to improve their finances and wound up avoid buying. The Swedish Government employee salaries paid during this period. The Government salary guarantee occurs even if a company in bankruptcy.

Swedish car filed an application for bankruptcy protection on Wednesday, including plans for a reorganization, it claimed would help reinvigorate the brand.

But the Court said it remains unclear how Saab - in 2009, she was a reorganization under GM - the money needs to find water.

Swedish car Dutch CEO Victor Muller, hoping for a 245 million € ($ 344 million)Cash injection of Chinese investors Zhejiang Youngman Lotus Automobile Co. and Pang as automobile trade co., the currently regulatory approval is waiting.

"It seems unclear if - and if so, when - the Chinese authorities approve the agreement" the Court said, adding that other financing solutions, non-sustainable seem presented by the company.

"In sum, the Court notes that it seems unclear, how the company can the liquidity crisis to solve and operations," the ruling said.

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Saab said in a statement, it was "disappointed" and would appeal the decision and update of the market "further developments" Friday. It gave no details.

Hakan Skott, Heimatverein of Chairman of Trade Union IF metal in Trollhattan, the decision of the Court called "sad" and said Union members checks filing bankruptcy proceedings against Saab in "the next couple of days."

"We are approaching 14 days without salary payments and the financial situation is always hard for some of our members, said Skott."

Union, an organization of work for employees, said it would wait no more than three days before the filing of a bankruptcy petition for Saab - if the company does not do it until then.

"It is our opinion that an employer, which ends in a situation like this even in bankruptcy, after", said Martin Wastfelt, senior legal advisor to the Union.

Tom Muller, analyst at Theodoor Gilissen in Amsterdam, said that he believes that trade unions can maximum wait two to three days before the filing of a bankruptcy.

"The company can do only one thing and that is to you money," said Muller, not related to the Swedish car Chief Executive. "The members have to eat." ... "People can not promise life."

He said he does not believe that Swedish car the means be able to find at the time.

"It is a good car, there is nothing wrong with the product, but it is the financial situation, which is the problem," he said.

Copyright 2011 of the associated press. All rights reserved. This material cannot be published, sent, rewritten or redistributed.

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