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Saab Reportedly Seeking Court Protection

Maker hoping to buy time to line up new funds.

by on Aug.26, 2011

Image By: Len Katz

Saab Chairman Victor Muller may be forced to seek court protection to avoid the complete collapse of the Swedish company.

With another payroll likely to be missed and suppliers still refusing to provide the parts it needs to re-open its headquarters assembly plant, Saab is reportedly ready to seek court protection to buy time as it goes searching for more funding.

The news came hours after the maker said it would delay the release of its first-half 2011 financial report.  That report, now scheduled for next week, is expected to be grim.  The maker has produced only a small number of vehicles since it was struck by a supplier boycott, in late March, triggered by unpaid bills.  Despite lining up a series of potential alliances that management had hoped would resolve its financial problems those deals remain tied up in bureaucratic analysis leaving the maker struggling for its survival.

In a terse statement, parent company Swedish Automobile N.V., or SWAN, said it was “aware of certain reports in Swedish media related to a possible filing…for a voluntary reorganization under Swedish law.”

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The statement neither confirmed nor denied the reports, first aired on Swedish public radio but said only that the company is “evaluating all available options” and is “in discussions with several parties to secure the short-term and medium-term funding of Saab Automobile to restart and sustain production.”