Bail Out: Does GM Owe Russia’s Sberbank For The Defunct Opel/Magna deal?
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It took months for Sberbank attorneys to construct the 9,000 page contract that was supposed to seal the Opel/GM/Sberbank/Magna “deal-of-the-century.” 48 hours prior to the execution of that contract, the folks at GM decided to implement a “bail-out” of their own which left Sberbank and Magna wondering “why?” Sberbank is now following up GM’s bail out with a claim that The General owes them some money. You see, when Sberbank attorneys constructed the very extensive contract proposal, their time was compensated with a large amount of money. So much in fact, that it was enough to prompt Sberbank to take action.
Sberbank CEO Stefan Gref stated that Sberbank “spent an awful sum, because we had to address complex tasks,” and that he “[hoped] that we shall be able to settle all issues out of court, but we shall be prepared to defend our position in courts of law.” Magna CEO Frank Stronach stated that his company’s bills from the transaction “weren’t material” which leads me to believe that they will most likely move on from this and chock it up as a learning experience.
It is not exactly known whether or not a clause existed in the contract prohibiting GM from simply walking away from the deal, but I would have to say Sberbank’s chances of winning anything at all are slim. Technically speaking, the contract was never signed thus releasing GM of any liabilities to Sberbank and Magna. If you take a step back and look at it from the outside, it seems like GM just got a case of cold feet and walked away. It is just unfortunate that they got so close to the execution date before pulling the plug on the deal.
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