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GM details plans to wipe out current shareholders [securities fraud]
The Globe and Mail / Reuters ^ | May 5, 2009 | Kevin Krolicki

Posted on 05/05/2009 9:06:48 PM PDT by 2ndDivisionVet

General Motors Corp on Tuesday detailed plans to all but wipe out the holdings of remaining shareholders by issuing up to 60 billion new shares in a bid to pay off debt to the U.S. government, bondholders and the United Auto Workers union.

The unusual plan, which was detailed in a filing with U.S. securities regulators, would only need the approval of the U.S. Treasury to proceed since the U.S. government would be the majority shareholder of a new GM, the company said.

The flood of new stock issuance that could be unleashed has been widely expected by analysts who have long warned that GM's shares could be worthless whether the company restructures out of court or in bankruptcy.

The debt-for-equity exchanges detailed in the filing with the Securities and Exchange Commission would leave GM's stock investors with just 1 percent of the equity in a restructured automaker, ending a long run when the Dow component was seen as a bellwether for the strength of the broader U.S. economy.

GM shares closed on Tuesday at $1.85 on the New York Stock Exchange. The stock would be worth just over 1 cent if the first phase of GM's restructuring moves forward as described.

Once GM has issued new shares to pay off its debt to the U.S. government, bondholders and its major union, it said it would then undertake a 1-for-100 reverse stock split.

Such a move would take the nominal value of the stock back to near where it had been before the flood of new shares. But in the process, GM's existing shareholders would see their stake in the 100-year-old automaker all but wiped out.

(Excerpt) Read more at globeinvestor.com ...


TOPICS: Breaking News; Business/Economy; Culture/Society; Government; US: Michigan
KEYWORDS: agenda; automakers; bailout; congress; corruption; democrats; economy; fascism; generalmotors; highcrimes; obama; securitiesfraud; uaw; unions; wallstreet
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The Nazis would have never dared this type of thing this early on in their reign.
1 posted on 05/05/2009 9:06:48 PM PDT by 2ndDivisionVet
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To: 2ndDivisionVet

What the HELL.

I don’t even recognize this country anymore.


2 posted on 05/05/2009 9:08:09 PM PDT by Constitution Day
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To: 2ndDivisionVet

They are dirtly, lowdown dogs.


3 posted on 05/05/2009 9:09:15 PM PDT by Wisconsinlady
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To: 2ndDivisionVet

The quintessential national socialist move.


4 posted on 05/05/2009 9:09:44 PM PDT by anniegetyourgun
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To: 2ndDivisionVet

I sent an email to my broker and that under no circumstances is he to buy any GM or Chrysler stocks or bonds.


5 posted on 05/05/2009 9:10:18 PM PDT by Parley Baer
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To: 2ndDivisionVet

Somehow I suspect that this kind of deal is a violation of existing Securities laws. But then laws are for the little people.


6 posted on 05/05/2009 9:11:41 PM PDT by P-Marlowe (Somebody stole my tagline)
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To: 2ndDivisionVet
"The unusual plan, which was detailed in a filing with U.S. securities regulators, would only need the approval of the U.S. Treasury to proceed since the U.S. government would be the majority shareholder of a new GM, the company said."

This whole corrupt, unconstitutional, criminal mess stinks to high heaven. Obama & Co should see prison time for this.

7 posted on 05/05/2009 9:13:35 PM PDT by Jim Robinson
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To: Constitution Day
What the HELL. I don’t even recognize this country anymore.

...and they are going to pay for your new GM car if you become unemployed. (Nevermind the idea that people whose job is at risk shouldn't be buying new cars.)

8 posted on 05/05/2009 9:14:01 PM PDT by FreeReign
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To: 2ndDivisionVet

I buy trucks for my business.

Now I’ll strictly be a Ford customer...


9 posted on 05/05/2009 9:14:17 PM PDT by Beaten Valve
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To: 2ndDivisionVet

Its basically a BK without the filing. The Obama Way. Interesting to see how they mix the reverse split with the DOW Average. No wonder they keep delaying the Stress Test results.


10 posted on 05/05/2009 9:15:14 PM PDT by Orange1998
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To: 2ndDivisionVet

I just don’t understand how this is even legal. I’m just speechless. Obama’s audacity has literally taken my breath away.


11 posted on 05/05/2009 9:16:28 PM PDT by Windflier (To anger a conservative, tell him a lie. To anger a liberal, tell him the truth.)
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To: Windflier
This is not a notice of a meeting of stockholders and no stockholders’ meeting will be held to consider the matters described above. We are not seeking any consent, authorization or proxy from you, and no action by you is required.

12 posted on 05/05/2009 9:19:12 PM PDT by Petronski (Learn about the 'cytokine storm.')
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To: Petronski

Ouch.


13 posted on 05/05/2009 9:20:45 PM PDT by Orange1998
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To: 2ndDivisionVet

What’s good for GM is good for America. and vice versa.


14 posted on 05/05/2009 9:22:08 PM PDT by spyone (ridiculum)
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To: Petronski
I wonder who is gonna give Bank of A the 30 Billion to satisfy the Stress Test.
15 posted on 05/05/2009 9:22:22 PM PDT by Orange1998
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To: FreeReign

Makes me glad I have a used (and fully paid for) European car.


16 posted on 05/05/2009 9:22:44 PM PDT by Constitution Day
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To: 2ndDivisionVet

This is just the first daylight robbery of many IMO.

Obama and his criminal congress need to be jailed for this BS ! they are maddoff, enron, etc all rolled into one .


17 posted on 05/05/2009 9:27:25 PM PDT by Squantos (Be polite. Be professional. But have a plan to kill everyone you meet)
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To: 2ndDivisionVet
And if anyone was planning on getting up earlier than usual tomorrow, NO, you will not be able to borrow shares to short GM. Haven't been able to for weeks. (to the best of my knowledge, tried a few times)

Our country is under attack by an illegitimate poser who is destroying our country as fast as he can before he's recognized for what he is and makes his peace with the Caterpillars.

That's about as rosy a forecast as I can come up with.

18 posted on 05/05/2009 9:30:03 PM PDT by 4woodenboats (The economic crisis worked so well, an open border enhanced pandemic is just too tempting for ghett0)
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To: 2ndDivisionVet

How is this legal?

Can’t current stockholders sue to stop this?


19 posted on 05/05/2009 9:31:41 PM PDT by exit82 (The Obama Cabinet: There was more brainpower on Gilligan's Island.)
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To: Constitution Day

Tell me about it! $100, with low miles on it.

20 posted on 05/05/2009 9:32:20 PM PDT by 2ndDivisionVet ("The unarmed man is not just defenseless - he is also contemptible." Machiavelli)
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To: anniegetyourgun
No, the quintessential fascist move. Please, let's get our terms correct, ok?/s
21 posted on 05/05/2009 9:33:10 PM PDT by khnyny ("The demagogue is one who preaches doctrines he knows to be untrue to men he knows to be idiots.")
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To: Orange1998

Mr. Buzzard had a pretty good look at it.


22 posted on 05/05/2009 9:33:32 PM PDT by eyedigress
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To: Windflier
Obama’s audacity has literally taken my breath away.

They did not call it the Audacity of Nope for nothing.

23 posted on 05/05/2009 9:33:54 PM PDT by nwrep
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To: 2ndDivisionVet

Twilight-of-America BTTT


24 posted on 05/05/2009 9:35:15 PM PDT by Constitutionalist Conservative (Two blogs for the price of none!)
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To: 2ndDivisionVet

That article is like 100 percent BS.

They are talking of a 10:1 reverse split which will REDUCE the number of shares to 61 million from the current 610 million.. that would move the share price from $1.85 to $18.50.


25 posted on 05/05/2009 9:35:23 PM PDT by RDasher ("El Nino is climate, La Nina is weather")
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To: 2ndDivisionVet

Seems to me some Obama voting retired “friends” of ours said in November that they had stock or bonds in GM....gee...that’s too bad. (Haven’t heard from them in awhile....I think they maybe are trying to stay afloat....and they don’t like my emails about Obomba’s pursuits.)


26 posted on 05/05/2009 9:35:33 PM PDT by goodnesswins (WE have a REPUBLIC.....IF we can KEEP IT!!!)
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To: Jim Robinson
This whole corrupt, unconstitutional, criminal mess stinks to high heaven. Obama & Co should see prison time for this.

Not good enough. This is outright robbery under color of law and principles of contract law and property rights be DAMNED.

27 posted on 05/05/2009 9:36:13 PM PDT by Centurion2000 (We either Free America ourselves, or it is midnight for humanity for a thousand years.)
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To: RDasher
by issuing up to 60 billion new shares

You must have missed this part.

28 posted on 05/05/2009 9:37:48 PM PDT by Centurion2000 (We either Free America ourselves, or it is midnight for humanity for a thousand years.)
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To: 2ndDivisionVet

What model Benz is that? I would like something like that to drive to work and back.


29 posted on 05/05/2009 9:41:25 PM PDT by randomhero97 ("First you want to kill me, now you want to kiss me. Blow!" - Ash)
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To: randomhero97

It’s a 1984 M-B 300D turbo diesel.


30 posted on 05/05/2009 9:42:49 PM PDT by 2ndDivisionVet ("The unarmed man is not just defenseless - he is also contemptible." Machiavelli)
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To: 2ndDivisionVet

I may give it a go.


31 posted on 05/05/2009 9:43:35 PM PDT by eyedigress
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To: RDasher; Petronski

Credit to Petronski-
This is NOT BS

“The Restructuring Transactions will cause very substantial dilution to existing holders of GM common stock. As of March 31, 2009, there were 610,505,273 shares of GM common stock outstanding. Assuming full participation in the Exchange Offers, the aggregate amount of GM common stock issued in connection with the Exchange Offers will be approximately 6.1 billion shares, which, based on the number of shares of GM common stock outstanding as of March 31, 2009, would represent approximately 10% of the pro forma outstanding GM common stock; the aggregate amount of GM common stock issued to the U.S. Treasury (or its designee) pursuant to the U.S. Treasury Debt Conversion and to the New VEBA pursuant to the VEBA modifications will be approximately 54.4 billion shares, which would represent approximately 89% of the pro forma outstanding GM common stock, with the final allocation between the U.S. Treasury (or its designee) and the New VEBA to be determined in the future (however, as a condition to closing the Exchange Offers, subject to the overall limit of approximately 89% of the pro forma outstanding GM common stock to be issued to the U.S. Treasury (or its designee) and the New VEBA in the aggregate, the U.S. Treasury (or its designee) will hold at least 50% of the pro forma outstanding GM common stock); and existing GM common stockholders would hold approximately 1% of the pro forma outstanding GM common stock. We determined the foregoing GM common stock allocations following discussions with the U.S. Treasury where the U.S. Treasury indicated that it would not be supportive of higher allocations to the holders of GM Public Debt or to the existing GM common stockholders.”

The Treasury (or it designee) gets 50% of ** 60.5 BILLION ** shares. Current common stock holders get par value. That is $0.01


32 posted on 05/05/2009 9:44:21 PM PDT by AH_LiveRight
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To: AH_LiveRight

Geez, I didn’t know so many people get hurt when a company is nationalized by its gov’t.


33 posted on 05/05/2009 9:47:03 PM PDT by umgud (Look to gov't to solve your everday problems and they'll control your everday life.)
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To: 2ndDivisionVet

Bye, bye Mrs. American Pie. Gonna have to drive my Fiat to the levy now.


34 posted on 05/05/2009 9:47:33 PM PDT by smokingfrog ( Don't mess with the mockingbird! /\/\ http://tiny.cc/freepthis)
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To: 2ndDivisionVet

I’m going to PM you so I don’t hijack this thread.


35 posted on 05/05/2009 9:51:52 PM PDT by randomhero97 ("First you want to kill me, now you want to kiss me. Blow!" - Ash)
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To: randomhero97

LOL!


36 posted on 05/05/2009 9:52:56 PM PDT by eyedigress
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To: smokingfrog

Actually, judging by sales history, you’d more likely be driving your Camry to the levee. And it does rhyme.


37 posted on 05/05/2009 9:53:30 PM PDT by Spktyr (Overwhelmingly superior firepower and the willingness to use it is the only proven peace solution.)
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To: Petronski

NYSE rules require listed companies, such as GM, in general to obtain shareholder approval before issuing new shares that exceed 20% of their outstanding shares.

It is not clear to me how this plan is legal under the NYSE rule if they do this without putting it to a vote of existing shareholders.


38 posted on 05/05/2009 9:53:37 PM PDT by SirJohnBarleycorn
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To: Centurion2000

I didn’t it was 60 MILLION not 60 BILLION the article is WRONG


39 posted on 05/05/2009 9:53:38 PM PDT by RDasher ("El Nino is climate, La Nina is weather")
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To: Spktyr

I’ve been drivin’ my Ford to the levee for years. Sadly it didn’t rhyme.


40 posted on 05/05/2009 9:56:58 PM PDT by eyedigress
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To: 2ndDivisionVet

Buh-bye GM! Your only possible buyers are Code Pink, DailyKos, and MoveOn.org.

You sold your soul to a frikin’ TELEPROMPTER! lol!


41 posted on 05/05/2009 9:57:24 PM PDT by avacado
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To: eyedigress

“Jaguar,” “Nissan,” “Honda” and “Toyota” don’t rhyme either. I took my Jeep to the levee but the parking brake didn’t hold and it almost rolled into the river.


42 posted on 05/05/2009 9:58:21 PM PDT by Spktyr (Overwhelmingly superior firepower and the willingness to use it is the only proven peace solution.)
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To: eyedigress
I’ve been drivin’ my Ford to the levee for years. Sadly it didn’t rhyme.

Maybe you should've driven it to the fjord.

43 posted on 05/05/2009 9:59:44 PM PDT by Texas Eagle (If it wasn't for double-standards, Liberals would have no standards at all. -- Texas Eagle)
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Comment #44 Removed by Moderator

To: Texas Eagle
It's so late here I’ll give an obligatory LOL! LOL!
45 posted on 05/05/2009 10:01:48 PM PDT by eyedigress
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To: RDasher
I didn’t it was 60 MILLION not 60 BILLION the article is WRONG

Really now? Can you please post the alterante sources that show that? Thanks in advance.

46 posted on 05/05/2009 10:02:53 PM PDT by Centurion2000 (We either Free America ourselves, or it is midnight for humanity for a thousand years.)
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To: eyedigress
It's so late here I’ll give an obligatory LOL! LOL!

It's been a tough crowd tonight so I'll take it.

47 posted on 05/05/2009 10:03:13 PM PDT by Texas Eagle (If it wasn't for double-standards, Liberals would have no standards at all. -- Texas Eagle)
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To: Spktyr

Ah..My levee days are over. I’m all Honda. No more breaks.


48 posted on 05/05/2009 10:03:54 PM PDT by eyedigress
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To: 2ndDivisionVet

“The Nazis would have never dared this type of thing this early on in their reign.”

Shocking, isn’t it?


49 posted on 05/05/2009 10:04:12 PM PDT by ought-six ( Multiculturalism is national suicide, and political correctness is the cyanide capsule.)
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To: Texas Eagle

Awesome!


50 posted on 05/05/2009 10:04:56 PM PDT by Gondring (Paul Revere would have been flamed as a naysayer troll and told to go back to Boston.)
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