July 16 (Reuters) - The bankrupt U.S. arm of Swedish automaker Saab Automobile AB has gained court approval of a plan to liquidate and pay back creditors, effectively ending its bankruptcy.
Judge Christopher Sontchi, of U.S. Bankruptcy Court in Delaware, on Monday signed off on Saab Cars North America Inc’s plan to pay back all secured creditors and some portion of unsecured claims, while wiping out equity holders.
Saab North America was forced into bankruptcy last year by several of its U.S. dealers after its parent entered liquidation proceedings in Sweden.
Formerly owned by General Motors Co, the Saab parent was sold to the Dutch car market Spyker Cars NV in 2010, but that company faced is own liquidity issues and could not keep Saab profitable.
Under Saab North America’s liquidation plan, secured creditors, including Ally Financial, the U.S. government-owned auto lender, will receive full payout, according to court papers.
Unsecured claims, such as those likely to arise from Saab’s abandonment of leases and contracts, are slated to earn between 25 percent and 82 percent recovery.
Unsecured claims total about $77 million so far, but that does not include contract rejection claims likely to be asserted by Saab’s U.S. dealers, Saab said in court papers. Unsecured creditors’ ultimate payback percentage will depend in part on how large those claims turn out to be, it said.
It will also depend on the success of a trust formed under the plan to litigate against creditors and affiliates in hopes of reducing the size of those entities’ claims against Saab’s estate.