Breaking News: Saab Files Bankrupcty

Posted: February 20, 2009

Saab has filed for bankruptcy protection in Swedish court, a move widely expected after the government in Stockholm denied General Motors' request for financial assistance for the troubled premium car brand.

The move, according to the New York Times, is "part of sweeping restructuring plan by its parent, the General Motors Corporation. Saab, which GM said would become an independent business by 2010, went to a Swedish court for protection from its creditors, and said the company would - with assistance from the Swedish government - reorganize to pave the way for private investors to buy all or part of it." The company says it will "continue to operate as usual" during bankruptcy proceedings

In order for the company to survive as an independent entity, Autoblog notes, "GM needs to line up financing for the new company, which may be problematic. Automotive News reports that as much as $1 billion may be in order to make Saab sustainable on its own." No one seems to know where those funds would come from - "The Swedish government has already rejected a GM request for funds, so the money will have to come from somewhere else."

If GM is unable to obtain so-called Debtor-in-Possession financing to support the company's operations during a bankruptcy restructuring, the next step would be for the courts to liquidate Saab, selling off its assets to pay its debts.

There is one silver lining for Saab fans: so much uncertainty over the brand's future is likely drive down already low prices.  Research the best car deals with U.S. News' car rankings and reviews.