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Lofalk’s request to be replaced turned down (for now)

December 16, 2011 in News

The court ruled this morning that Lofalk must remain at least until Monday. They want to give the creditors a chance to have their say in the choice of a new administrator.

Given the short time remaining until Monday’s meeting, the court decided they could not at this point grant Lofalk’s request.

41 responses to Lofalk’s request to be replaced turned down (for now)

  1. Now, I would image that that has given him some pause for thought.

  2. Amazing how much text a court can produce in such a short time. :)

    The decision, 23 pages (including a list of 132 creditors) is available here:
    http://www.vanersborgstingsratt.domstol.se/SAAB/

  3. Many key issues now, key issue number one without doubt.. Get salaries out to the employes before monday.

  4. GL should stand in front of the audience to answer critical questions and should tell people what he did or not did to get Saab on track.

    • That is not his job. That is (was) Saabs management’s job.

      • Harsh but true, after this is all done and dusted I would love to here what really did happen and why it took so long for our SAAB to get back up and running.

      • The more important question is why GL tried -and succeeded- to destroy every deal Saab management had in store going into reorganization, but lets leave it at that and get the new guy in.

        • just guessing:
          because he sees more chance to get money back to creditors (at least some of it) (creditors are “on hold” in dry – during reconstruction) if Saab go bust than in some “deal” – which always include some unknown partner, imaginative bank, financial group nobody know, unobtainable conditions etc.
          He sees that bankrupcy will generate more revenues than endless waiting for “money ex machina” or miracle. His opinion, all the actions come from it. Logical to me.
          Capitalism is tough game. Fair, but tought.
          He stated, he cannot see anyhow Saabs management can restart the company. It is his opinion. In this opinion is behind is actions.
          And if Saab’s management cannot (they didn’t yet – did they? – after months and months) restart the production he probably sees Saab controled death as better solution for creditors and overall financial outcome of the reconstruction.
          (I am not going into why production is not running – diff story), but it is not GL’s job.
          As I said before.

          (but it is just my view, could be wrong, sure)

          • If anyone thinks I got cynical about all it, so it is true. I was not, now I am. :-/

          • “-Capitalism is tough game. Fair, but tough”.

            Capitalism? You call this version of capitalism fair when four-five Government entities have been pulling Saabs strings since April. Not to mention GM that should have gone under by the rules two years ago.

            • Amen RS, Amen. There is a chance that if GM had not been bailed out, their assets would have been sold to other car companies and interested parties. Saab might be in a stronger position right now—-not still under the thumb and whims of GM executives who failed but have been propped up.

            • It does appear that Sweden has done more to hurt than help. Certainly a far cry from a bailout.

          • If he thought that then he must be the stupidest administrator ever appointed. If Saab crashes then the business creditors/suppliers get exactly zilch, after the preferential creditors have been dealt with: the various lien holders (like Pang Da who get Saab GB and its central London real estate and oher buildings), the Swedish government (guarantee EIB, some 270 million euros, secured by Saab assets), the tax office and other government institutions, the banks, Hemfosa (those guys get all Saab real estate in THN when Saab stops paying the lease, so no buildings or terrains in the bankruptcy sale either), there are a few more like that… The claims of those will by far exceed anything the fire sale of parts of a bankrupt Saab can ever generate. And the suppliers know that, that’s why CLEPA wants Saab to go on. So you will forgive me if I don’t agree with your opinion at all, cynical or not.

            Ivo

      • Gannet,

        Sorry, but whilst Saab is in Reconstruction, it is indeed LG job, as his authority as the administrator over rules Saab management & indeed VM.

        This is probably what has caused the conflict with the two sides..

        Saab is probably worth more in Bankruptcy at the moment, provided of course the IP to it’s assets still stays with them & has not been hived off somewhere.

        • Of course I mean’t GL and not LG

        • Saab is worth just about nothing if it is allowed to go bankrupt.

          If Saab goes bust then the entity GM has those IP licence contracts with no longer exists. Then those contracts automatically become void and no Saabs of the current generations can be built until the someone who buys the Saab corpse negotiates new agreements with GM or starts building cars that contain no GM IP at all. Should that someone be from China -or maybe even anyone from the car industry, wherever they are based- then I wish them lots of luck with that. They’d also need to buy or lease or beg, steal or borrow the Saab brand name. I have already read that Saab Aeronautic won’t do that. So what is that someone really going to buy?

          If Saab is to remain in existence as a car brand that actually builds Saab cars then it’d better not go bankrupt.

          Ivo

          • Ivo.

            I did not say that was my preference, but from a ££ point of view, NO money = NO Saab.

            The IP, I referred to is the wholly owned Saab IP, Not the licenced stuff granted by GM.

            It cannot be long now, until Saab’s 6 months free rental period is up & Hemfosa will be looking for monthly Rent again….

            • Yes, but Saab-only owned IP isn’t enough to build cars with. And what is there (electric stuff, the electro-hybrid auxiliary rear axle drive, some more power/less emission diesel engineering, some environmental engineering), however interesting, might probably not justify the investment. I doubt that the bankruptcy curator would be willing to sell the IP without the rest. The best deal, as it looks to me at least, is to buy Saab as a going concern and not try to acquire bits and pieces. Saab as a manufacturer is still a global brand with a dealer network, parts distribution etc. and it can provide access to markets relatively cheaply, without a big investment on the buyer’s part.

              Ivo

          • The existing dealership network in the U.S., small as it is, would cost millions of dollars to replicate. That is worth something. If a suitor could get the rights to the name Saab for automobiles (not easy maybe, but possible) and the dealership network, they’d at least have something to start with. A company like Suzuki, if they could afford this, would do quite well with it. Also, IMO, Mazda is sort of like the Japanese Saab in terms of how their cars feel and are engineered for the driver. I don’t know what sort of financial condition they are in, but it might make sense for them to expand this way too.

  5. DI has an interesting summary of the situation facing Saab before Monday’s meeting.

    http://di.se/Default.aspx?sr=23&tr=297471&rlt=0&pid=253925__ArticlePageProvider&epslanguage=sv&referrer=http%3A%2F%2Fdi.se%2FNyheter%2F%3FCollapseTopMenu%3Dtrue

    The most important point is what we all know… that Saab/Youngman have to prove that obligations can be met, most importantly salaries, through available cash or possibly a bank guarantee.

    The article also discusses Lofalk’s position and that his word as administrator carries a lot of weight in a case like this.

    • I think this is dead serious, and VM and YM would better be well prepared, have all the necessary transactions done and a credible plan for afterwards with binding commitments than just verbal indications for huge sums to come. I do not know what they are still negotiating about, but not to have a final solution with absolute binding agreements after 7 months of negotiations would seriously harm the credibility, that something will come ever.

      • Well, maybe they would have if Lofalk hadn’t suddenly started suffering from delusions of grandeur and thinking he is a big international dealmaker.

        Ivo

  6. Fascinating. And no salary $ yet (I presume if there were it would be a major headline here).

    Is there a “Catch 22″ here? Youngman would have to be extremely brave to send tens of millions right now, without knowing if there will be a company next week. But if they don’t, can VM and Youngman convince the court that “its coming”? This is edge of your seat drama.

    • Yep, there is probably a Catch-22 here. Youngman likely want to see a continued reconstruction (or even a final deal) before they are willing to commit huge amounts of cash, and the court wants to see the cash before they are willing to extend reconstruction.

      In the end Youngman will have to be the ones to commit first though. I don’t believe the law lends the court any flexibility here. Saab/YM need to prove they can fulfil obligations. Unpaid salaries + empty bank account automatically disqualifies them from an extension.

      A bank guarantee was mentioned in the DI article linked above as an alternative to cash. Maybe they can resolve the catch 22 situation through some sort of conditional bank guarantee / escrow type solution? Money proven to exist, and is held by a bank for transaction, but only if extension is granted? Don’t know if that would sway the court to be honest, but it is a more prudent option for YM I guess.

    • Could they carry with them into the courtroom suitcases of cash?

      YM: “If you agree to continue reconstruction, judge, I will slide these cases across the table to VM” ;)

      • Seriously, it could be like that. Youngman has the bucks in a Swedish account ready to transfer as soon as a continued reconstruction is granted. They have to look after their risk, too.

  7. Somehow I can´t help thinking it must be bad for Mr Lofalk to have SAAB hanging around like a pain in the *ss ;-)

  8. Looking on this latest turnaround on keeping the old administrator (until Monday) get think me about how difficult it must be running a company in Sweden.
    I know the people manufacturing the Saabs in Trollhättan are doing a really good job. I was my self at the factory years ago. But is there a base of understanding and respect in doing business in west Sweden? Should Saab move production to an other country? Or is it possible that politics change in near future to find a common understanding?

    • Actually, I think it is a reasonable request by the court to keep Lofalk in charge until the hearing. After all, it is his decision to halt reconstruction that is the reason for the meeting. It only makes sense that he stays in charge until the court has held the hearing and made a decision on his submission.

      And I don’t really see how that particular request by the court would have any bearing on business conditions in Sweden?

      On that topic, IMHO Sweden is actually a pretty good base for business nowadays. There are some issues (somewhat rigid employment laws), but not a big deal compared to some other countries I have been active in…

  9. I would guess it is the Court’s opinion, that on Monday next, if there is no solid money on the table to move the reconstruction forward, then why is it necessary/what is the point to appoint a new Administrator today, when maybe on Monday, it will be the Fat lady in Court.

    The VM-R Pang deal has to be solid for Monday, with Cash on the table, for this all to continue…..

  10. A screen writer would have trouble coming up with a script that is this fascinating. In fact, this whole saga really does prove that truth is stranger than fiction and sometimes more unbelievable. We need to start figuring out who is going to play the parts in the movie. What actor will play the part of VM, George Clooney? For Lofalk, I nominate the guy who played Corky in “Life Goes On.”

  11. So then, Friday has been and gone and in the words of famous Tom Cruise film….SHOW ME THE MONEY… the weekend has started, Monday is just around the corner….radio radio come on come on please just one more glimmer of hope …. make the people and the children of SAAB Trolhatten happy Christmas is looming bring them a worth while and waited for surprise

    X

    • If you like Tom Cruise maybe you should watch his latest movie: Mission Impossible. (opened today) By the way Tom’s character, Ethan, gets the job done.

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