Saab Cars North America will be liquidated
January 24, 2012 in News
From Autonews.com The administrator handling Saab Cars North America’s finances told creditors last week that the company will be liquidated.
“We notified creditors that it is our opinion that there is no way to salvage the company,” said Jim McTevia, of McTevia & Associates, the administrator appointed to operate the U.S. distribution arm.
Parent company Saab Automobile filed for liquidation Dec. 19 in a Swedish bankruptcy court. Saab Cars North America suspended operations that day.
Saab Cars North America “laid off probably 80 percent of the employees” on Jan. 13, said McTevia.
He said he is seeking a buyer for the U.S. parts distribution business, which he described as the only meaningful asset.
Tim Colbeck, president of Saab Cars North America, expects a buyer for the parts business will be found by the end of February. “There still will be a market for parts,” Colbeck said. The question is whether there will be a U.S. distributor for parts.”
McTevia said he told creditors: “There is no money to keep the company going until someone figures out what to do.”
He added: “They have some parts inventory, which we started distributing. There are no new parts coming in.”
Leonard Bellavia, the lawyer representing 161 of Saab’s 188 dealerships, said he expects dealers to decide this week or next whether to file for a Chapter 7 involuntary bankruptcy or wait for the administrator to liquidate the company. The dealers’ decision will be based on which option potentially gives them a greater portion of the proceeds.
McTevia said the U.S. entity is “probably going to go on for a while because there is all kinds of litigation. There are assets to be liquidated.” The company’s headquarters in Royal Oak, Mich., near Detroit, will be closed by the end of February.
Bellavia estimates the liquidated assets have a value of between $75 million and $125 million, including $25 million owed by General Motors for warranty work. He estimates liabilities at $10.5 million.
Saab resumed parts distribution to dealers on Thursday, Jan. 19. The operation was suspended Dec. 19.
Read more: http://www.autonews.com/article/20120123/RETAIL07/301239957#ixzz1kKLaz9et