–The wage guarantee is a good protection for the employees, notes Simon Engman.
As Northvolt initiated its own bankruptcy filing, the Stockholm District Court was able to render a decision before midday on Wednesday. Northvolt's nomination of Mikael Kubu from Ackordcentralen as the bankruptcy trustee was approved. He previously served as a restructuring administrator for SAS.
Kubu also acted as the bankruptcy trustee for the automotive component company IAC, which entered bankruptcy in January 2024. That insolvency impacted 1,400 employees and numerous consultants. In February of this year, he facilitated an agreement with a new owner.
With the declaration of bankruptcy, Northvolt's board of directors is dissolved, and the bankruptcy trustee assumes responsibility for the debtor's assets and the management of the bankruptcy estate."
The bankruptcy trustee also informs employees about the wage guarantee, which has been handled by the Swedish Tax Agency since February 1 this year. Previously, this responsibility lay with the County Administrative Board.
– The wage guarantee is a good protection for employees, notes Simon Engman of Kaiding.
It means, for example, that employees can receive wages earned up to three months before the bankruptcy filing and wages for the first month after the bankruptcy decision. Additionally, employees are entitled to vacation pay and severance pay. Through the bankruptcy, a bankruptcy estate is created.
The estate is not burdened by the company’s history, does not take over its debts, and has no outstanding claims from the Enforcement Authority. However, the bankruptcy estate also does not have any credit to rely on.
Northvolt's bankruptcy trustee, Mikael Kubu.
– In this case, I could imagine that Northvolt’s customers, who depend on access to their batteries, might step in as guarantors. This has happened in other similar large bankruptcies, says Engman.
For the bankruptcy trustee, the goal is to extract as much compensation as possible from the company’s assets to maximise the outcome for creditors.
– The best possible outcome for Northvolt, and likely for the creditors as well, would be to find a new owner who can take over the already operational business. I actually believe there are good chances for that, says Engman.
He notes that there are strong forces committed to ensuring battery production remains in Europe.
– There are very strong Asian battery manufacturers that could potentially buy Northvolt, but it is a highly sensitive security policy issue to handle, says Engman.
Northvolt's bankruptcy is now a fact.
If no buyer is found, it will be up to the bankruptcy trustee to sell off premises, equipment, and other assets.
– But that would, of course, destroy value, and I sincerely hope that won’t be the case for the battery factory in Skellefteå, says Engman.
When asked whether he thinks Northvolt should have filed for bankruptcy instead of entering a restructuring process in the US, he responds that "it’s easy to be wise in hindsight."
– I have full respect for the board and management wanting to explore all options, and in the end, the result was bankruptcy. Perhaps it would have been better for the business and the employees to apply for this earlier, he concludes.