Saab Succeeds in Appeal Against Bankruptcy

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Swedish car manufacturer, Saab was at the brink of involvency when a last minute appeal to the court granted them a stay. The appeals court overturned an earlier court ruling and gave Saab time to reorganize their finances and secure additional funds. The judgment also protects the Swedish car maker from creditors.

Saab’s financial woes began when GM sold it off last year. The 60-year old auto maker could not carry on production when suppliers stopped supplying parts because they were not paid. The debt Saab owes its suppliers comes up to about 150 million euros ($205 million). The assembly lines in its main factory in Trollhaettan have been completely idle since June.

The workers unions have also begun taking legal action over non-payment of salaries to its members. In August, after workers were not paid for the third consecutive month, workers unions attempted to force the company into bankruptcy to initiate a state-funded program to pay for workers’ salaries. However, the action failed. Nevertheless, the union did succeed in getting the workers paid because creditor protection also activates the state wage-guarantee scheme.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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