Posted on 04/28/2009 10:48:31 AM PDT by Kieri
A committee representing General Motors Corp. bondholders is rejecting the company's debt exchange offer, saying it pushes the automaker closer to a bankruptcy filing. The committee, representing large, institutional bondholders such as Fidelity and John Hancock, said in a statement Monday that GM's offer is inadequate and shows favoritism to the United Auto Workers union. The UAW would receive about a 39 percent stake in GM if it agrees to take $10 billion in health care trust payments in stock. Bondholders will get a 10 percent stake in GM if 90 percent of its $27 billion in unsecured debt is swapped for stock. The group was working with GM to reach an agreement before the company made a formal offer, but the two sides have not negotiated since March.
There must be a downside.
Good. They need the BK for a cram down on the unions which is what killed them. Otherwise, watch tax $$ fund the unions for decades to come...
In a real bankruptcy, one where you hope to remain viable and fight another day, bond holders go to the front of the line ... Not first out the rabbit hole
I’m keeping an eye on card check. I’m betting the liberals will try to ram this through congress back-door style, as a compromise to the UAW.
Of course it does, now.
Keeping the feds out of GM as much as possible is good for GM and good for america.
If the government owns the majority stake in
GM it will not go bankrupt. Instead, we, the taxpayers will end up funding a failure.
Shouldn’t a judge be presiding over this? The UAW has $10B and gets 39%, whereas bondholders have $27B and get 10%? How is this legal?
That and more. *sigh*
The bond holders can’t possibly get a worse deal from a bankruptcy court.
There's no way in hell they should be forced to settle for 5 or 10 cents on the dollar.
Enough with the fascist bullshit already. Time to file.
It will be the US version of Britsh Leyland.
The affirmative action Marxist won the election. He makes the rules now.
Pretty fuzzy math, wouldn't you say!
Fascists see laws like ice cream: easily melted.
Bond holders get 10% for their $27 billion and the left wing who caused it gets 39% for a lie that says they would have gotten $10 billion for health care but when one is bankrupt there is no money to pay for health care. And the socialist get 50% of the company. So the people that have invested in bonds will be eliminated and their retirement money will be gone and given to the anti-American left. And the anti-American left who caused this in the first place will be placed in charge. I do not think that I will ever again buy a GM car.
Looks like some of them grew a backbone, and realized they would get a fairer break from a bankruptcy judge than the kleptocrats in the Obama admin and their UAW pals.
More than ever, it is absolutely imperative that a bankruptcy court judge resolve GM. Otherwise we will be left with a state and union owned entity permanently sucking the public teat.
Good on the bond holders. Zero’s sweetheart deal for the unions goes down in flames.
Yes, there is a downside!
See:
http://www.freerepublic.com/focus/f-bloggers/2239054/posts
Government, UAW To Own 89% Of GM In Restructuring
Or the US version of 1930s Volkswagen.
QFT.
Because their messiah Zero says so.
Obama is ALREADY paying off the Unions!!!
This wasn’t an offer, it was an Attempted robbery !!
It's a negotiation. Obama's $.10 on the dollar first offer was just to let the bondholders know who's the boss. I'm guessing that they'll settle for somewhere around $.20-.25 on the dollar and the union will still have controlling interest.
No way does this go to a traditional bankruptcy hearing. Obama owes the UAW far too much to let that happen.
Generally, bond holders go to the front of the line. A Bond is a form of contract, between the company and the bond buyer. Suppliers come next. Employees and stockholders figth for what is left.
You surely don’t expect the UAW, which because of their unsustainable contracts, caused the problems, to take over the company.
Who will buy their Volgas? Speak up.
No, it is not “legal”!
But:
“Welcome to New Kenya, where the law of the jungle has replaced the Law of the Land”
What’s good for GM is good for America...................
Couldn’t the bondholders force GM into bankrupcy rather than being defrauded like this?
They are anticipating a collapse of General Motors and have rightly figured that they could get far more than 10 cents on the dollar even if they just sell off the company's real estate holdings.
Probably, that is likely why they said no ...
GM owns an awful lot of salable plant and equipment. Bond holders and the suppliers get first dibs on it. Not the UAW.
My suspicion is Bambi will make them whole.
Bond holders don't have to agree, but maybe Rahm Immaneul will take Luca Brazzi and make them an offer they can't refuse. "In five minutes, either your brains or your signature will be on that contract."
Ya shudda come to me first, I cudda helped you
If the government owns a $15 billion stake and the bond holders $27 billion, how do they figure the government is the majority stake holder? Why do the unions get 39% of the company and the bondholders 10%?
If that deal went through, the union would run the company. That would last about two years at best before they would completely collapse.
I’ve been trying to get a test drive of the Camaro. Been told twice over the past three weeks the car would be in within a day or two. Both dates went by, not in. That is how the company is running now. As far as perhaps getting a super sport, well, no idea when that would ever happen.
I decided to buy a Genesis...told the car would be here within a week.
Vince
Obama is just keeping a campaign promise to ‘give the wealth to those who created it.” (workers)
The Barbarians are inside the gates.
What does a ‘worker owned society’ look like? I guess we’ll find out.
Never gonna by a GM product again.
Obama is just keeping a campaign promise to ‘give the wealth to those who created it.” (workers)
The Barbarians are inside the gates.
What does a ‘worker owned society’ look like? I guess we’ll find out.
Never gonna by a GM product again.
Actually in a bankruptcy proceeding...wages and then pensions are first in line. The bondholders will deal...just like Chrysler’s have at the 11th hour.
‘These are astute bond holders’
McCotter is trying to determine which bond holders bought Credit Default Swaps on their bonds from AIG to make them whole if GM fails. (JP Morgan, Goldman Sachs?)
The Taxpayers would still be taken to the cleaners.
Is the Feds total investment in GM at this point $17 billion? I can”t remeber exactly.
At any rate for roughly $17 billion the Feds get 50%, for $10 billion the UAW gets 39%, and for roughly $24.3 billion (90% of $27 billion) the bondholders get 10%???????
Welcome to Amerika, comrade.
The bondholders have no choice but to force GM’s hand. Bankruptcy would be much more equitable. Clearly robbery such as this is but one of the many reasons we can’t allow our benevolent leaders to come to our rescue.
They need to reject it, it’s a raw deal for them, a sweetheart deal for the UAW!
Pensions generally depend on a going concern for their continuance. There just isn't enough money without the business continuance. I bet this is why the union is being given the majority ownership stake ... Who bails out all the other companies who went broke.
Obviously the bond holders have some power, they said NO. Whether they settle at the 11th hour, up to them, they can do what they want, or are forced to do.
“Never gonna by a GM product again.”
Obama’s goons will force you to or to the re-education camp you go — in a GM truck.
LLS
We own four now - Corvette, pickup, Blazer, and Suburban. It'll be Toyotas from now on.
The UAW may do well in the final looting, but GM is a corpse going forward. The government is incapable of producing a product that anyone wants, and the UAW has bled it’s host into a coma from which it will not return.
No one is discussing what will happen to the dealers.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.