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Corporate Reorganizations 11/2/2009 6:49:30 PM EST The Saab Reorganization in Sweden: The Expedited and Successful Restructuring and Sale of a Global Automobile Manufacturer
Calendar year 2009 has been a watershed time for reorganizing automobile manufacturers globally. Two of the three primary American auto assemblers, Chrysler LLC and General Motors Corporation, sought relief under Chapter 11 of the United States Bankruptcy Code in the first six months of the year. General Motors’ European subsidiary, Adam Opel GmbH, and its British sister company, Vauxhall Motors, Ltd., have been sold to a joint venture involving Magna International, an Austrian-Canadian auto supplier, and Sberbank Rossii OAO, a Russian commercial bank with ties to GAZ Group, a Russian automobile manufacturer, although at the date of this writing the sale has yet to close. Finally, Saab Automobile AG, another foreign subsidiary of General Motors, filed for reorganization in Sweden in February, 2009, under Sweden’s Reorganization of Business Act. In these court proceedings, the administrator of Saab successfully restructured its debt and sold its assets to a consortium headed by Koenigsegg Automotive AB, a specialty automobile manufacturer. The goal of the Saab reorganization proceedings, i.e., the sale of Saab on a going concern basis, was accomplished in less than a year and these proceedings were terminated in August 2009. This success story and an analysis of Sweden’s Reorganization of Business Act follow.
I. History of Saab Automobiles
A. The Founding and Growth of Saab
Saab automobiles were first manufactured in 1947 by the automobile division of the Swedish Aeorplane Company, Svenska Aeroplan AB[1], that was established in the city of Trollhaettan, Vaestra Gotaland County, in the southwest of Sweden. That year, Saab produced its first vehicle, the Saab 92, with a two-cylinder engine that realized the lowest drag coefficient of any automobile produced that year. In 1969, during the expansion of the worldwide market for Saab vehicles, Saab merged with Scania AB, a Swedish manufacturer of heavy trucks, buses and diesel engines; this merger was uncoupled in 1995 and the two companies went their separate ways.[2]
Saab gained an allure in the late 1970s and early 1980s as the maker of stylish, high-end and high-performance vehicles that generated significant consumer demand throughout the world, especially in the United States where the Saab 900 Turbo became one of the cars of choice of the “yuppie” generation.[3] In 1978, Saab entered into an agreement with Fiat S.p.a. to develop jointly a new car platform that resulted in the Alfa Romeo 164, Fiat Croma, Lancia Thema and the Saab 9000.
In December, 1989, General Motors purchased 50% of Saab’s automotive division and, as a result, created Saab Automobile AB. General Motors was granted at the same time an option to purchase the remaining shares of Saab within a 10-year period. In 2000, General Motors exercised this option and Saab became another one of its wholly-owned, European subsidiaries along with Adam Opel GmbH and Vauxhall Motors, Ltd.[4]
B. The Global Recession of 2008-2009 and its Effect on Saab
The global recession of 2008-2009 and the accompanying worldwide credit crisis severely impacted sales of Saab vehicles, with Saab sharing the pain with its parent company and its other subsidiaries. In 2008, only 93,295 Saab vehicles were sold worldwide, 21,383 of them in the United States.[5] As of the end of 2008, Saab had production facilities in (i) Trollhaettan, Sweden, (ii) Graz, Austria, (iii) Moraine, Ohio (USA), and (iv) Uusikaupunki, Finland (a joint venture with Valmet Automotive, Inc., a Finnish manufacturer of specialty cars). Saab produced only 90,281 vehicles in 2008, a drop of approximately 35,000 from the previous year.[6] Saab was the worst selling General Motors brand during 2008.
During the fall of 2008, the chief executives of Chrysler and General Motors appeared at public hearings before the United States Congress and pressed for governmental financial assistance for their respective enterprises on account of the dismal state of the American economy and the North American automotive sector. At roughly the same time, Saab appealed to the Swedish government for similar state aid; Saab had experienced losses of approximately $3 billion Swedish Kronor (“SEK”), which translated at the then current exchange rates as $343 million (U.S.). General Motors requested a loan of 5 billion SEK or $565 million (U.S.) from the Swedish government in order to continue operations at Saab until the beginning of 2010 but this request was rejected.[7] Swedish Industry Minister Maud Olofsson was quoted as saying that Saab’s survival was General Motors’ responsibility and that GM’s business plan for Saab was not “realistic.” She continued by declaiming that the “Swedish state and taxpayers in Sweden will not own car factories. Sometimes you get the impression that this is a small, small company but it is the world’s biggest automaker so we have a right to make demands.”[8]
Shortly after this request for state aid was turned down, Saab commenced a voluntary proceeding on February 10, 2009, under the Swedish Reorganization Act in the district court in Vanersborg, a city near Saab’s manufacturing facilities in Trollhaettan.[9] After Saab filed its application for reorganization, Saab’s Managing Director, Jan-Ake Jonsson, remarked that Saab would “continue to explore all available options for funding and/or selling Saab” and that Saab’s board of directors had determined that “a formal reorganization would be the best way to create a truly independent entity that is ready for investment.”[10] General Motors’ Group Vice President for Purchasing, Bo Andersson, who began his career at Saab, contended that GM was “fully committed to maintaining a viable and successful local and global supplier base during the Saab reorganization.”[11]
II. Swedish Business Reorganization Law and the Saab Proceedings
A. Description and Analysis of Sweden’s Reorganization of Business Act
1. Commencement of the Reorganization Proceedings
The Reorganization of Business Act (Sw: “foertagsrekonstruktion”) adopted in Sweden in 1996 establishes special procedures for the reorganization of financially troubled businesses. These procedures are separate from those prescribed by the Swedish Bankruptcy Act that provide for the liquidation of insolvent corporations. A reorganization proceeding is commenced by the filing of an application by the business debtor with a Swedish district court, which filing must be approved by a resolution of the debtor’s board of directors. The application need not contain proof of insolvency but must describe the debtor’s economy, difficulties in paying its debts as they become due and facts indicating a reasonable possibility of a successful reorganization.[12] Upon the filing of the application, the district court may enter an order formally opening the reorganization case, appointing an administrator to examine the debtor’s affairs with the power to negotiate with creditors the terms of a reorganization plan.[13] Upon being appointed, the administrator must promptly notify all known creditors of the debtor that the reorganization proceedings are pending and must provide the creditors with certain financial information concerning the debtor.[14] If the court determines that there is no valid reason to believe that the business can be reorganized, the court may decline to open the proceedings.[15] The length of these proceedings is three months although the court may decide to extend the proceedings at three-month intervals upon the request of the debtor.[16]
2. Pre-Plan Administrative Issues in Swedish Reorganization Proceedings
(i) Stays of Creditor Action
Upon the commencement of reorganization proceedings, unsecured creditors are prohibited from commencing actions to collect pre-filing debts and executing on the debtor’s assets. However, litigation by creditors pending against the debtor as of the date the proceedings were opened is not stayed. Secured creditors holding a pledge of the debtor’s property are also not stayed from realizing on their collateral although these creditors must follow a specific statutory procedure in doing so.[17]
(ii) Operation of the Debtor’s Business
Upon the opening of proceedings, the debtor will continue in possession and control of its assets but must consult with the administrator concerning their proposed use and disposition. The debtor, nonetheless, must conduct its business operations in a manner to protect against further deterioration of its financial condition. During this period, the debtor may not pay nonpreferential, pre-filing claims of creditors without the consent of the administrator.[18]
(iii) Treatment of Executory Contracts
The Swedish reorganization statute establishes certain rules concerning contracts that are in existence as of the date the proceedings are opened. These rules permit the debtor, with the administrator’s consent, to demand performance by all parties to each contract. If the contract was breached by the debtor before the proceedings were commenced but was not then terminated, the nondebtor party is prohibited from terminating after the filing.[19] However, unlike Chapter 11 of the United States Bankruptcy Code, Swedish reorganization law does not permit the debtor to reject executory contracts.
(iv) Post-Filing Loans
The debtor may, with the administrator’s consent, obtain new loans during the proceedings that must be paid in full or receive a preferential status in future bankruptcy cases.[20]
(v) Appointment of Creditors Committees
Upon the request of a creditor, the district court will appoint a creditor’s committee consisting of three members. The administrator has the duty to consult with the committee on significant issues arising during the proceedings unless there is no opportunity to do so given the circumstances, e.g., in the case of an emergency requiring immediate action by the administrator.[21]
3. Reorganization Plans
The administrator, in consultation with the debtor, will normally prepare a proposed reorganization plan describing how the debtor’s financial and business problems will be addressed and resolved and then transmit that plan to the court and the creditors.[22] If the plan is accepted, then the plan will be implemented by the debtor and when the reorganization has reached its goal, the administrator will be discharged and the reorganization proceedings will be terminated by the district court.[23] If no consensual plan is accepted by the creditors, then the debtor may file with the district court an application for a public (compulsory) composition proceeding wherein a “cram down” plan may be proposed and approved by the court that will pay less than 100% of the claims of nonpreferential creditors. The composition proceeding requires voting on the plan by the creditors. If the dividend will be less than 50 % of claims, which is common, the composition must be approved by at least 75 % of the voting creditors and their claims must amount to at least the same percentage of the total amount of claims entitled to vote.[24] Alternatively, if the aim of the reorganization cannot be achieved, the process will be ended by the Court and, as a consequence, the debtor may then commence a liquidation proceeding.[25]
B. Saab’s Reorganization Proceedings and their Successful Conclusion
1. Appointment of Administrator
Upon the commencement of the Saab reorganization proceedings in the Vanersborg district court, that court appointed Guy Lofalk, an experienced insolvency lawyer with the Stockholm law firm of Lofalk Advokatbyra, as the administrator of Saab. Also, Alix Partners, a global restructuring firm, was made available to Saab during the restructuring process.[26]
2. Funding of Operations During Proceedings
In order to finance the operations of Saab during the reorganization proceedings, General Motors loaned $150 million (U.S.) to Saab shortly after the filing. General Motors has since declared that it will forgive this unpaid indebtedness even though it is classified as a preferential claim in the proceedings entitled to full payment.[27] Part of Saab’s funding of the operations also has been made by the Swedish state-owned Wage Guarantee Fund that, in certain circumstances, will pay salaries to a company’s employees during a reorganization. This state funding is capped at approximately 171,000 SEK per employee and reorganization proceeding.[28]
3. Court-Ordered Extension of Three-Month Periods of Administration
On May 20, 2009, Saab requested from the district court of Vanersborg an extension of the time to accomplish the reorganization for an additional three months to August 20, 2009. The reason for the request was that Saab needed more time to implement its reorganization plan and to finalize the reorganization with respect to Saab’s operative and financial divisions that had not been finished at the time of the application. The request was approved by the district court of Vanersborg on 29 May, 2009.[29]
4. Marketing of Saab Assets for Sale as a Going Concern
General Motors and its adviser, Deutsche Bank, have since the beginning of Saab’s reorganization searched for a new owner. A short information memorandum of Saab, a so-called “teaser”, was transmitted to a selection of possible interested parties.[30] The selling-process began with 27 interested parties, of which 20 signed a confidentiality agreement. Of these twenty, approximately ten potential bidders were invited to Saab’s plant in Trollhaettan.[31] Afterward, three candidates were selected to continue the negotiations for the acquisition of Saab, which finally concluded with the sale to the Koenigsegg Group.
5. Sale of Assets to Koenigsegg Group
On June 15, 2009, General Motors agreed to sell the Saab assets to a newly formed consortium led by Koenigsegg Automotive AB, a Swedish manufacturer of custom-made, luxury automobiles. This consortium, named “Konigsegg Group”, and General Motors executed a memorandum of understanding for the sale of Saab’s assets including the brand.[32] The investors in this new entity are (i) Koenigsegg Automotive AB, holding a 23.4% interest, (ii) Alprazz AB, another Swedish corporation controlled by the founder of Koenigsegg, with a 42.6% stake, (iii) Eker Group, a Norwegian holding company with an 11.8% share, and (iv) an American, Mark Bishop, who owns the remaining equity (22.2%).[33] Koenigsegg Automotive had been established in 1994 by Christian von Koenigsegg, the company’s current CEO, who has been described as a “Swedish sports car fanatic and entrepreneur.”[34] This company has historically manufactured and sold only 12 to 15 custom-made automobiles per year, employs only forty-five (45) workers and maintains its manufacturing facilities at a former Swedish air force base near Angelholm in southern Sweden. The prices of a Koenigsegg automobile are not advertised but are believed to range between 8 million and 18 million SEK, which translates as between $1 million and $2.3 million (U.S.).[35] The media reported when this sale was announced that General Motors would, after the closing of the sale, provide new Saab with automotive components and technology, and that production of the new Saab 9-5 model would remain at the Trollhaettan plant and not be shifted to the Opel plant in Ruesselsheim, Germany.[36]
6. Proposal of Reorganization Plan and its Approval
Saab’s reorganization plan was presented to its creditors at the creditors meeting on April 6, 2009. The plan consisted of several measures designed to return Saab to profitability. Organic changes were proposed to make Saab independent of General Motors, to streamline the production and development of several new models, all of which are hoped to make Saab profitable at a lower yearly sales volume.[37] The financial reorganization included a composition agreement providing for the forgiveness of 75 % of the pre-reorganization debts, new financing through a loan of approximately $600 million (U.S.) from the European Investment Bank and contributions on $400 million (U.S.), consisting of both forgiveness of debt and delivery of tools to manufacture new car models by General Motors.[38] The plan also included as a decisive factor a change of ownership through a sale of Saab to a new entity.
Saab’s creditors thereafter overwhelmingly approved the composition, which involved writing off debts of approximately 8.3 billion SEK; only one creditor out of 473 voting creditors rejected the plan.[39] One explanation for this vote is that General Motors during the reorganization proceedings has repaid many of Saab’s suppliers and thus was assigned these supplier’s claims and votes on the plan against Saab.[40] Of Saab’s total debt of approximately 10.6 billion SEK, General Motors holds 9.7 billion SEK; the next largest creditor is the Government of Sweden with 347 million SEK.[41] The one creditor voting against the composition was the Swedish Tax Authorities. Sweden, through the Swedish Tax Authorities, is planning to demand payment of 75 million SEK for earlier payments from the state-owned Wage Guarantee Fund which the Tax Authorities do not consider to be part of the composition. However, Saab has argued that the composition includes this amount.[42] The dividend from the composition shall, according to Saab’s managing director Jan Ake Jonsson, be paid from Saab’s own cash.[43]
7. Termination of Proceedings
On August 19, 2009, the administrator filed with the district court a notice that he would not seek another three-month extension of the Saab reorganization proceedings. This notice had the effect of terminating those proceedings.[44] At the same time, Augie Fabela, the American chairman of the Koenigsegg Group, announced to the media that, in order to close this asset purchase, 3 billion SEK ($413 million) in financing would be needed in addition to an anticipated loan of $593 million to be made by the European Investment Bank and guaranteed by the government of Sweden.[45] The Koenigsegg Group had previously applied to the government for a loan to close the sale transaction but that request was denied. Frederik Reinfeldt, the Swedish prime minister, said at that time that he was “not prepared to mortgage Sweden or act as a venture capitalist for the well-to-do.”[46]
8. Anticipated Closing of Saab Asset Sale
On September 9, 2009, the Koenigsegg Group announced that a slice of its equity would be sold to Beijing Automotive Industry Holding, an automobile manufacturer owned by the Peoples Republic of China, in order to raise equity for the purchase of Saab from General Motors. At that time, a General Motors spokesman stated that the closing of the Saab sale was expected by the end of October, 2009. [47]
III. Conclusion
Whether viewed up close or at a distance, the Saab reorganization proceedings under Sweden’s Reorganization of Business Act were successful and were accomplished without stretching and bending that statute in order to achieve a socially desirable result. As noted above, Saab filed its application for reorganization in February, 2009, continued to operate smoothly with post-filing funding provided by its parent, General Motors. In June, 2009, a mere four months after the proceedings commenced, General Motors and Koenigsegg Group signed a memorandum of understanding for the sale of Saab’s assets. The administrator, Guy Lofalk, with Saab’s concurrence, proposed a reorganization plan in April 6, 2009, which was thereafter accepted by creditors and, on August 19, 2009, the district court terminated these proceedings upon the administrator’s request. All that remains to be done is for the Koenigsegg Group to close this sale and acquire the Saab assets. Existing Swedish law provided the framework for the prompt reorganization of Saab. Throughout the course of these proceedings, there was little drama and no significant twists and turns of fortune, so unlike a thriller by Stieg Larsson or Henning Mankell.
The Chapter 11 cases of Chrysler LLC and General Motors, commenced only months apart in the United States Bankruptcy Court for the Southern District of New York[48], provide both a point and counterpoint to the Saab proceedings. These cases resulted in the prompt reorganization of these two American auto assemblers. The Chrysler reorganization was completed on June 1, 2009, with its acquisition by Fiat and the General Motors bootstrap restructuring was finished on July 5, 2009. However, in order to accomplish these restructurings in the form desired by the debtors and the United States Government, the two bankruptcy judges assigned to these cases were required to stretch and perhaps violate the existing law governing distributions in Chapter 11 cases. In distributing equity in these reorganized auto companies to groups of creditors, the courts allowed certain of these groups, in particular, the union employees, to receive a larger share of this equity than they would otherwise be entitled to receive to the prejudice of the unsecured bondholders of each debtor.[49] This questionable result was achieved under public pressure by the Obama Administration to reorganize the debtors in this fashion.
At the other end of the reorganization spectrum lies the case of Adam Opel, GmbH, the German subsidiary of General Motors and its British sister company, Vauxhall Motors, Ltd. Opeland Vauxhall are in the process of being restructured by means of a sale of 55% of their stock to a consortium consisting of Magna International, Inc. and Sperbank Rossii OAO. Under the agreement arrived at by GM, this joint venture and the European automobile workers’ unions, General Motors will retain 35% of its equity interest in Opel/Vauxhall and the employees will receive the remaining 10% upon the closing of this restructuring.[50] The distribution of equity to the unions is in return for their consent to projected reductions in the workforce and the anticipated closing of at least one Opel plant, probably the Antwerp plant. This sale will be accomplished by the payment by Magna/Sperbank of 500 billion Euros and 4.5 billion Euros in loan guaranties by the German government.[51] This sale, which was long in the making and has not yet closed, did not happen without incident, however. The governments of Spain and Belgium have protested to the European Commission over what they characterized as the disproportionate impact on the plants and workforce in their countries of the projected costs reductions in contrast to the relatively light reductions affecting Opel’s German plants and workforce.[52] Spain and Belgium argue that Angela Merkel’s promise of German state aid in the form of these loan guaranties violates European Union antitrust law.[53]
About the Authors
With nearly 540 legal professionals throughout offices in Atlanta, Chicago, Delaware, Indiana, Michigan, Minneapolis, Ohio, and Washington, D.C., Barnes & Thornburg LLP is one of the largest law firms in the United States, offering clients virtually all the areas of concentration one would expect in a large, full-service law firm.
Patrick Mears
Partner, Barnes & Thornburg LLP
Patrick E. Mears is a Contributing Author to the treatise, Collier Bankruptcy Practice Guide, and is the Chairperson of the Finance, Insolvency and Restructuring Department of Barnes & Thornburg, LLP, resident in its Grand Rapids, Michigan office. Mears is an elected member of the American Law Institute and an elected fellow of the American College of Bankruptcy. Mears has authored numerous articles and treatises on insolvency and creditors’ rights law during his 33 years of practice. He and his colleague, John T. Gregg, are the principal authors of the treatise, Auto Supplier Insolvencies and Bankruptcies: Issues for Suppliers and Customers of Financially Troubled Auto Suppliers, published by the American Bankruptcy Institute in 2006.
John T. Gregg
Attorney, Barnes & Thornburg LLP
John T. Gregg is a member of Barnes & Thornburg’s Finance, Insolvency and Restructuring Department. He has extensive experience representing secured creditors, debtors, committees, asset purchasers and other parties in interest in reorganizations, liquidations and other insolvency proceedings. He has been involved in numerous bankruptcies and workouts in various industries, including automotive, manufacturing, real estate, airline, investment banking and retail. Mr. Gregg has significant experience in the automotive industry and has represented parts suppliers, tool vendors, secured creditors, committees, health insurance providers, asset purchasers and landlords in numerous automotive-related matters.
Setterwalls is one of Sweden’s leading commercial law firms with over 150 lawyers, including 43 partners, working from offices in Stockholm, Gothenburg and Malmoe. Setterwalls was established in 1878 and provides a full range of legal services to Swedish and international business clients.
Mathias Winge
Senior Associate, Advokat, Setterwalls
Mathias Winge has extensive experience in creditor, reconstruction and insolvency related questions within IT, financial, construction and hotel businesses and receives receiverships regularly. Mathias has been leading and assisted in a large number of bankruptcies, whereof several larger bankruptcies with international connections. Mathias give advice in formal and informal reorganizations and related issues such as acquisitions of insolvent entities, structuring of internal transactions within insolvent Groups, purchasing of creditor’s claims, debt to equity swaps, security realizations etc. Mathias also regularly advises companies and business organizations within the forest industry and finance companies in general commercial matters. Finally, Mathias acts as counsel in insolvency related lawsuits for example advising creditors in relation to recovery of assets, personal liability for boards etc.
[3] “Saab Automobile”, Wikipedia, http://en.wikipedia.org/wiki/Saab_Automobile; Anders Tunberg, From Two-Stroke to Turbo, Motor Racing Publications Ltd., London (1980); Anders Tunberg, Saab 900: A Swedish Story, Norden Publishing House Ltd., St. Gallen, Switzerland (1993).
[12] Swedish Reorganization of Business Act at chapter 2, paragraph 3.
[13] Swedish Reorganization of Business Act at chapter 2, paragraph 10.
[14] Swedish Reorganization of Business Act at chapter 2, paragraph 13.
[15] Swedish Reorganization of Business Act at chapter 2, paragraph 6.
[16] Swedish Reorganization of Business Act at chapter 4, paragraph 8.
[17] Swedish Reorganization of Business Act at chapter 2, paragraph 17.
[18] Swedish Reorganization of Business Act at chapter 2, paragraph 15.
[19] Swedish Reorganization of Business Act at chapter 2, paragraph 20.
[20] “Restructuring and Insolvency 2009 Section for Sweden” by Odd Swarting, Setterwalls Advokatbyra.
[21] Swedish Reorganization of Business Act at chapter 2, paragraph 16.
[22] Swedish Reorganization of Business Act at chapter 2, paragraph 12.
[23] Swedish Reorganization of Business Act at chapter 4, paragraph 7.
[24] Swedish Reorganization of Business Act at chapter 3, paragraph 4.
[25] Swedish Reorganization of Business Act at chapter 4, paragraph 7.
[26] The formal document of the application for reorganization for Saab Automobile AB.
[29] The formal document of the request for extension of the time for the reorganization procedure and the district court of Vanersborg’s decision.
[30] The formal document of the preliminary reorganization plan for Saab Automobile AB.
[31] The formal document of the request for extension of the time for the reorganization procedure.
[37] The formal document of the preliminary reorganization plan for Saab Automobile AB.
[39] Press release from Saab, August 20, 2009.
[47] “Chinese Carmakers Set Sights on Sweden”, New York Times Online, http://www.nytimes.com/2009/09/10/business/global/10saab.html?adxnnl=1&adxnnlx=1255547. On October 21, 2009, the European Investment Bank approved a loan of $600 million (U.S.) to finance this acquisition. In order for this loan to close, however, the government of Sweden must issue a guaranty of payment for the loan and the European Union competition authorities must approve the loan. Financial Times, EIB Loan Opens the Door to Saab Sale, p. 15 (October 22, 2009).
[48] In re Chrysler LLC, Case No. 09-50002 (Bankr. S.D.N.Y. April 30, 2009); In re General Motors Corp., Case No. 09-50026 (Bankr. S.D.N.Y. June 1, 2009).
[49] For the decisions authorizing distributions of equity in the “new” Chrysler and GM, see In re Chrysler LLC, 405 B.R. 84 (Bankr. S.D.N.Y. 2009), stay granted by 2009 U.S. App. LEXIS 12351 (2d Cir. June 5, 2009), cert. dismissed by Center for Auto Safety v. Chrysler LLC, - - - U.S. - - -, 2009 U.S. LEXIS 5099 (U.S. Aug. 24, 2009); In re General Motors Corp., 407 B.R. 463 (Bankr. S.D.N.Y. 2009), cert. denied by 409 B.R. 24 (Bankr. S.D.N.Y. 2009), stay denied by 2009 U.S. Dist. LEXIS 61279 (S.D.N.Y. July 9, 2009).
[53] Id. Article 87 of the European Union Treaty generally prohibits aid by a member state or through “State resources in any form whatsoever which distorts or threatens to distort competition by favoring certain undertakings or the production of certain goods shall, insofar as it affects trade between Member States, be incompatible with the common market.” On October 15, 2009, the EU Competition Commissioner, Neelie Kroes, advised German Economy Minister (Wirtschaftsminister) Theodor zu Guttenberg, that German state aid to facilitate the Opel/Vauxhall Sale may violate Article 87 of the EU Treaty, pointing to “significant indications that aid promised by the German government to New Opel was subject to the precondition that a specific bidder, Magna/Sberbank, was selected.” “Opel’s German Aid May Break Rules”, BBC News Online, http://news.bbc.co.uk/go/pr/fr/-/2/hi/business/8311770.stml.
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