US Federal Judge Dismisses Spyker's $3 Billion Lawsuit Against General Motors For Saab Automobile's Bankruptcy

on June 11 2013 5:30 AM
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A U.S. federal judge on Monday dismissed Dutch sports car maker Spyker NV's (AMS: SPYKR) $3 billion lawsuit accusing General Motors Co (NYSE:GM) of preventing the sale of Swedish automaker Saab to Chinese investors.

U.S. District Court Judge Gershwin Drain said at a hearing in Detroit that General Motors, or GM, had an absolute right to oppose Saab's sale, according to an agreement it made with Spyker, when it sold the Swedish automaker to Netherlands-based Spyker in 2010, for $74 million.

"General Motors had a contractual right to approve or disapprove the proposed transaction," Drain said, according to a Reuters report. "The court is going to grant the motion to dismiss the matter."

Spyker sued GM in August 2012, alleging that the U.S. automaker tried to block a deal to sell Saab to China's Zhejiang Youngman Lotus Automobile Company in late 2011. Spyker sought damages to the tune of $3 billion, alleging that GM had blocked the deal to protect its position in the market, and blamed the Detroit carmaker for Saab’s bankruptcy in 2011.

"GM's actions had the direct and intended objective of driving Saab Automobile into bankruptcy, a result of GM's tortuously interfering with a transaction between Saab Automobile, Spyker and Chinese investor Youngman that would have permitted Saab Automobile to restructure and remain a solvent, going concern," Spyker had said in a statement earlier, according to the Guardian.

The judge said that Spyker was aware of the clause in the agreement on GM’s right to prevent Saab’s ownership change, when it bought Saab. He added that GM’s opposition to the deal was not to intentionally harm Saab.

"We are pleased with the court's decision to dismiss the case, which we believe was the appropriate result," GM spokesman Dave Roman said in an email, Reuters reported.

Spyker Chief Executive Victor Muller declined to confirm whether he would appeal the decision. "Spyker will assess whether it shall exercise its right to appeal upon review of the said Memorandum Opinion," Spyker said in a statement.

Saab, one of Sweden's popular brands, stopped production in May 2011 and filed for bankruptcy after it failed to pay suppliers and employees.

The case is Saab Automobile v. General Motors Co., 12-cv-13432, U.S. District Court, Eastern District of Michigan (Detroit).

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