Court approves Saab's bankruptcy protection bid
AFP/The Local · 21 Sep 2011, 14:06
Published: 21 Sep 2011 13:04 GMT+02:00
Updated: 21 Sep 2011 14:06 GMT+02:00
- Third union demands Saab bankruptcy (21 Sep 11)
- Appeals court to review Saab reconstruction (19 Sep 11)
- Unions file bankruptcy petition against Saab (12 Sep 11)
"The appeals court reverses the district court ruling and allows Saab … to reorganise," the Appeals Court for Western Sweden said in its decision.
The ruling places on hold thousands of individual requests that Saab be declared bankrupt by company employees and union members who have yet to receive their August wages.
It also makes it possible for Saab's around 3,700 employees to receive their salaries.
Saab also has towers of unpaid bills from suppliers, some of which have also requested it be placed in bankruptcy.
The appeals court said the district court's finding that Saab was lacking in the goodwill and brand strength needed for the reorganisation to succeed was unfounded and gave the company three months to turn itself around.
"In this case, the appeals court deems that a more in-depth probe could show that there is a basis for a successful reorganisation," it said.
After 12 weeks, the bankruptcy protection would be lifted if no extension request had been filed and granted, it said.
Saab's Dutch parent company Swedish Automobile has argued it only needs to keep its creditors at bay until regulatory approval goes through for its anticipated cash injection of €245 million ($335 million) from its
Chinese partners Pang Da and Youngman.
The company, which says it has about €150 million in outstanding debt, has said it expects that cash influx in November.