Spyker Sues GM for $3 Billion Over Saab Bankruptcy
Spyker NV (SWAN), the Dutch owner of the Saab brand of cars, sued General Motors Co. in the U.S. for $3 billion over claims it sought to drive the company into bankruptcy by avoiding competition in the Chinese market.
GM’s actions had the “direct and intended objective” of forcing Saab into bankruptcy in December, Spyker said in a statement today. The lawsuit was filed in federal court in Detroit, where GM is based.
The complaint accuses GM of “interfering with a transaction with Chinese investors that would have permitted Saab to restructure and remain a solvent, going concern.”
Saab hasn’t built cars since last year and filed for bankruptcy in December. Saab has been unprofitable for most of two decades, and GM, which acquired full control of the manufacturer in 2000, sold it in February 2010 to Spyker.
“Ever since we were forced to file for Saab Automobile’s bankruptcy in December of last year, we have worked relentlessly on the preparation for this lawsuit which seeks to compensate Spyker and Saab for the massive damages we have incurred as a result of GM’s unlawful actions,” Spyker Chief Executive Officer Victor Muller said in the statement.
The lawsuit asks for a jury trial, “no less than $3 billion” in compensatory damages and unspecified punitive damages.
“We have reviewed the complaint, and it is completely without merit,” said Dave Roman, a GM spokesman, in an e-mailed message. “We will vigorously defend the company against these baseless allegations.”
GM fell 19 cents to $19.85 in New York Stock Exchange composite trading. GM shares have fallen about 25 percent in the past year.
Spyker said that Saab had been “close to reaching various deals to secure financing or restructure the company,” from May 2001 until its bankruptcy filing in December. GM thwarted these deals, using a provision of the 2010 agreement to acquire Saab, Spyker said in its complaint.
“GM created the appearance of initially encouraging Saab to enter into a deal with Chinese investors to save the company, only later to unlawfully pull the rug out from under Saab, driving it into bankruptcy liquidation,” Spyker lawyers said.
GM intended to “quash any financing or investment deal that could save Saab from liquidation, because GM simply sought to eliminate Saab from competition, particularly in the Chinese automobile market,” Spyker said.
As part of the 2010 acquisition, Spyker said, GM granted Saab a worldwide, royalty-free license to the U.S. automaker’s intellectual property needed to make certain vehicle models.
This agreement contained a “significant limitation on the license,” requiring prior written consent of GM Global Technology Operations Inc. for manufacture and assembly of vehicles in China.
GM opposed the proposed deals with Chinese investors and contended that this provision meant its prior consent was required before they could go forward, Spyker said. GM refused to approve of any deal that would involve Chinese ownership or control of GM-licensed technology, according to the Spyker complaint.
Spyker and Saab attempted to structure a deal with Zhejiang Youngman Lotus Automobile Co. that wouldn’t require GM consent. Youngman’s loan to Saab would be converted into an equity interest only after the Swedish company stopped using GM technology in its vehicles, Spyker said.
GM blocked this as well through “false statements that its consent was somehow required” on the Youngman loan, Spyker said. “On Dec. 19, 2011, having been wrongfully deprived by GM of a means to secure further funding, Saab was forced to file for bankruptcy liquidation.”