Guy Lofalk, the administrator of Saab’s reorganization, will ask the court in Vänersborg to terminate the reorganization process. Before, Saab expressed “doubts that the bridge funding of Youngman and Pang Da, of which a partial payment has been received, shall be paid in full on 22 October 2011.” Finally something we can agree on.
What happens if the court accepts Lofalk’s recommendation? Stockholm News explains it:
“If the voluntary reorganization will be terminated is determined by Vänersborg District Court. It would mean that the resting bankruptcy claims against the company comes back into force.
The Swedish Enforcement Authority would also resume its recovery of the about SEK 1.4 billion of debts that Saab owes suppliers.”
In other words: The end.
Lofalk doesn’t seem to be impressed by the last ditch offer from U.S. private-equity firm North Street Capital. It probably has something to do with the fact that the loan would be partially collateralized by assets other creditors might want to get their hands on. Interviewed by Reuters, Lofalk said the $70 million promised by North Street Capital on Thursday for Saab would be far from enough to continue reorganization – if it ever arrives:
“The money is not enough to continue the reorganization. Now, an application to terminate the reorganization has been mailed. It should be on the court’s desk tomorrow.”
Lofalk added that the $70 million promised by North Street Capital on Thursday for Saab was far from enough to continue reorganization.
Lofalk also has written-off Youngman and Pangda as saviors:
“I can just say that the parties didn’t manage to reach an agreement on a sale.”
According to the Wall Street Journal, Saab will contest Lofalk’s application and request that the reorganization continues. Saab will also ask the court to give the heave-ho to Lofalk, and to appoint a new administrator. That’s a lot to ask for. As a court-appointed administrator, Lofalk works for the court and for the creditors, he doesn’t work for Victor Muller. The Vänersborg court had doubted the viability of the reconstruction in the first place and was overturned on appeal. What’s “I told you so” in Swedish?
The reaction in Swedish media – openly or between the lines – is that Lofalk wants to sell Saab lock, stock and barrel to the Chinese. He praised Youngman and Pangda, and implicitly blamed Muller for the failed negotiations. He wants Muller out – apparently also because the Chinese want full control.
In an interview with The New York Times, Victor Muller echoed that suspicion:
“Mr. Lofalk is completely focused on an ownership change. He wants to force Swedish Automobile to sell Saab.”
How would you decide as a Swedish judge?