Last-Minute Deal Saves Classic Saab Cars From Liquidation Sale

November 08, 2012

Last-Minute Deal Saves Classic Saab Cars From Liquidation Sale

In December, Saab owner Swedish Motors filed for bankruptcy in the Vanersborg District Court in Sweden, ending a two-year struggle to revive the company for its few but fiercely loyal customers. Two receivers are handling the bankruptcy, and they plan to sell off assets to pay Saab's creditors.

A few of the assets intended for sale were the cars in the Saab museum in Trollhattan, Sweden. Included in the intended auction was the original Ursaab, which was expected to fetch a fairly high price for a collector ("If it can save 100 litres of fuel a year, it doesn't matter if it looks like a frog," argued Gunnar Ljungstrom of Saab when the car rolled out). Executive Director Buddy Pepp of the Petersen Automotive Museum in Los Angeles told the New York Times that the Ursaab "will go for a lot of money." Another notable vehicle in the collection is the 1956 Sonett sports car.

Instead of auctioning the cars individually, however, the City of Trollhattan, Saab AB and the Marcus and Amalia Wallenberg Memorial Fund were able to raise the nearly EUR3 million ($3,943,000 at the time) needed to satisfy the two receivers and buy the assets intended for auction. The collection will remain intact in Trollhattan.

Among the loyal Saab fans is Jerry Seinfeld, whose Saab 900SE convertible played a prominent role in several episodes of his sitcom -- but was not involved in the auction.

Liquidation Bankruptcy

As Saab's last-minute deal shows, liquidation bankruptcy can provide otherwise unobtainable assets to interested buyers, but the complexity of many bankruptcies means a sometimes fluid situation. The price of assets in a company going through bankruptcy or in receivership is highly dependent upon the circumstances surrounding the bankruptcy. On occasion, however, assets are sold below market value, sometimes to a significant extent.

Once an asset is sold through bankruptcy, any creditor who otherwise had a claim to that property -- as would have been the case for the Saab Museum in the Swedish Motors bankruptcy -- has no legal ability to claim an ownership interest. The property is free and clear of liens and encumbrances.

Those interested in obtaining assets from a liquidation bankruptcy should contact a bankruptcy attorney familiar with buying assets at the best possible price and under the best possible circumstances.

Article provided by The Lobel Firm, L.L.P.
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