Saab Files For Bankruptcy Photo:
Tim O'Brien | Dec, 19 2011 | 0 Comments

Saab it seems has gone; just three months after being granted creditor protection while it voluntarily reorganised its business under a court-appointed administrator, the iconic Swedish brand has now filed for bankruptcy.

Clearly, after the administrator Guy Lofalk sought permission four days ago to resign and called for an end to creditor protection because the company had "run out of money", things were looking very grim.

And when part-owner General Motors point-blank refused to allow Chinese company Zhejiang Youngman Lotus to take a stake in the Swedish carmaker citing concerns over the licencing of its technology, Saab, it seems, had run out of options.

The announcement just hours ago would seem to have brought the curtain down - the documents requesting bankruptcy which will result in the appointment of a liquidator, were filed today with the Swedish Vanersborg district court.

The court's website is reporting that three Saab companies - SAAB Automobile Aktiebolag, Saab Automobile Tools AB and Saab Automobile Powertrain - are included in the request.

"The court aims to handle the request and appoint a liquidator rapidly," the website statement read.

Despite desperate eleventh-hour efforts to save the company, including negotiations with Zhejiang Youngman Lotus and distribution company Pang Da, Saab's former owner, GM, has remained intransigent.

Saab has not been profitable since 2001. It was teetering on bankruptcy when sold by GM to Spyker (later to become Swedish Automobile) in early 2010 for $US400 million.

In the light of that recent history, some in the boardroom of Swedish Automobile might now have a very dim view of GM's obstructionism while it has tried desperately to secure a lifeline through the Chinese.

But it's a tough world. While Saab's future has been in doubt since it was forced to halt production in April because it was unable to meet its payment obligations to suppliers, its 3700 employees have been unpaid since November and face a rough Christmas.

Unlike Chapter 11 bankruptcy, a US legal construct, bankruptcy for Saab and the appointment of receivers will likely inevitably see the company broken up with creditors lining up to pull what meat they can off the carcass.

Barring a miracle, it won't be a pretty sight.

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