Saab's disclosure statement OK delayed; Ally promises competing plan

By Jim Witters

Wilmington, Del., Nov. 16 - A judge postponed a ruling on the adequacy of Saab Cars North America, Inc.'s disclosure statement, giving creditor Ally Financial, Inc. about 30 days to prepare and submit a competing plan.

During a Nov. 16 hearing in the U.S. Bankruptcy Court for the District of Delaware, judge Christopher S. Sontchi said he was reluctant to approve the delay, but Ally deserved a chance to present a liquidation plan car distributor that Ally says would substantially increase the recovery to unsecured creditors.

Ally attorney Charles Tatelbaum said his client's plan will include about $20 million wrongly transferred from Saab Cars NA to its parent company before the bankruptcy petition was filed.

The increased recovery to unsecured creditors will bolster the former Saab dealers, who also owe money to Ally, he said.

Saab attorney Thomas B. Radom and Eric J. Snyder, representing the official committee of unsecured creditors, argued that Ally had ample time to file a competing plan and disclosure statement or to have its concerns address in the joint plan of liquidation pending before the court.

The debtors' exclusive right to file a plan and solicit votes expired in June, Snyder said.

Saab and the creditors committee also argued that Ally has no right to complain about its treatment under their plan because Ally's recovery under the plan is 100%. They also said Ally cannot argue that other creditors are being treated unfairly.

Sontchi rejected that notion, saying Ally has a right to litigate whether it is, indeed, unimpaired under the plan and to litigate whether the plan serves the best interest of creditors.

Tatelbaum said he needs more information from Saab officials to put together a disclosure statement and has scheduled meetings with two officials offered by the debtors.

New schedule

Ally asked for a 60-day deferral on a ruling on the adequacy of the debtors' and committee's joint plan.

Sontchi said Saab presented enough evidence to convince him that its disclosure statement is adequate. But he also said that if a competing plan is forthcoming, the two plans should move forward on the same timeline, so creditors have a clear choice when voting.

Sontchi gave Ally a deadline of Dec. 14 to file a competing plan of liquidation and a disclosure statement.

If no plan is filed, Sontchi will rule on Dec. 17 that the disclosure statement filed by the debtors and the creditors committee is adequate and they may proceed in soliciting votes to accept their plan.

If Ally files a competing plan, the parties will gather at 10 a.m. ET on Dec. 20 for a status conference on how to proceed with the case, Sontchi said.

Pending plan

Under the currently proposed plan, all of the company's remaining assets will be vested in a liquidation trust.

The company or a liquidation trustee will continue to sell any remaining assets until all assets are fully liquidated or abandoned.

Liquidation proceeds will be distributed to creditors.

All equity interests will be terminated, and Saab Cars North America will be dissolved after the plan effective date.

Creditor treatment

Treatment of creditors under the pending plan would include:

• Administrative expense claims and priority tax claims will be paid in full in cash;

• Other priority claims will be paid in full in cash, provided that higher priority administrative and priority tax claims have either been paid in full or the payment amount reserved;

• The secured CLS claim will be paid in full in cash from a parts escrow;

• The secured Ally Financial claim will be paid in full in cash solely from Ally collateral.

Any Ally collateral in excess of the allowed Ally secured claim will be transferred to the company or the liquidation trust;

• The secured U.S. Customs claim will be paid in full in cash solely from a cash bond.

To the extent the bond is insufficient to satisfy the claim, U.S. Customs will hold a general unsecured claim in the amount of the deficiency.

Any cash bond excess will be transferred to the company or the liquidation trust;

• Holders of general unsecured claims will receive liquidation trust assets after payment of all other claims; and

• Holders of equity interests will receive no distribution unless all other claims are paid in full.

Saab AB is a Trollhattan, Sweden-based car manufacturer. Subsidiary Saab Cars North America is based in Royal Oak, Mich. An involuntary bankruptcy case was filed against Saab Cars North America on Jan. 30, 2012. Its Chapter 11 case number is 12-10344.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.