DETRIOT - (Mealey's) SAAB Automobiles AB and its Dutch owner, Spyker NV, on Aug. 6 sued General Motors Co. in the U.S. District Court for the Eastern District of Michigan, seeking $3 billion in damages for allegations that GM took actions that "had the direct and intended" result of driving Saab into Chapter 11 bankruptcy (SAAB Automobiles AB, et al. v. General Motors Company, No. 12-13432, E.D. Mich.).
(Complaint available. Document #80-120808-029C.)
In 2009, GM filed for Chapter 11 bankruptcy in the U.S. Bankruptcy Court for the Southern District of New York. As part of its reorganization process, GM sought to unload car brands that it did not view as profitable or economically advantageous to maintain. Saab was one of the brands it sold.
In 2010, Spyker purchased Saab from GM. Spyker contributed $74 million in cash, and the European Investment Bank provided a 400 million pound loan guaranteed by the Swedish government. As a result of the transaction, Spyker acquired a majority interest in Saab, and GM retained a minority interest through preferred shares valued in January 2010 at approximately $326 million.
Under the sale agreement, GM sold its inventory of Saab service parts as well as technology it had developed. GM granted Spyker a non-exclusive, nontransferable, worldwide, royalty-free license to GM intellectual property necessary for the manufacture, assembly and service of Saab 9-5 and 9-3 models.
On Sept. 7, Saab sought voluntary reorganization under Swedish law.
On Jan. 30, SAAB Cars North America Inc., the U.S. division of Saab, filed for Chapter 11 bankruptcy in the U.S. Bankruptcy Court for the District of Delaware.
Before filing for bankruptcy, Saab was struggling to secure financing from various sources in order to keep its operations going. Saab contends that it was close to reaching agreements with investors when GM encouraged it to enter an agreement with Chinese investors.
However, Saab maintains that GM encouraged the deal with Chinese investors "only later to unlawfully pull the rug out from under Saab, driving it into bankruptcy."
Specifically, Saab argues that "it was GM's intent by whatever means necessary to quash any financing or investment deal that could save Saab from liquidation, because GM simply sought to eliminate Saab from competition."
Saab contends that it had an agreement with Zhejiang Youngman Lotus Automobile Co. Ltd., which did not require approval by GM. However, GM issued a statement stating that it did not support the proposed deal with Youngman and, Saab alleges, falsely represented that GM's approval was required to complete the deal.
The deal fell through, and Saab argues that it resulted in the company's filing for Chapter 11 bankruptcy.
Nigel L. Wilkinson, Benjamin G. Chew, Andrew Zimmitti, Rory E. Adams of Patton Boggs in Washington, D.C., represent Saab and Spyker.
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