GMs Bankruptsy very likely

[TSR2]

Looks like GM will file for Chapter 11 by June 1st

They have too many things to solve before that date , there is just not enough time,

Firstly they must negociate with each of the 6500 dealerships so as reduce the number by at least a third. This needs to be done on an individual basis . there are state laws protecting wholesale closures

The Bond Holders are refusing to accept what GM and Obama demands they do,
In the government proposal the UAW will get 39% stake in the deal (they are owed 20 billion re the Unions Trust) the goverment gets 50% . shareholders get 1% and the bond Holders get 10% of what is very iffy stock in exchange for 27 billion debt,

You can understand why the bond/shareholders are not very happy, the Union and Government getting preferential treatment.

nb the above info gleaned from Yahoo

[Jet Gorgon]

^ Yep, same with Chrysler bondholders -- Obama calls them greedy.

[barbaro]

GM is a garbage can. It should never have gotten a dime. The sooner, the better.

[Thai Pom]

It should never have gotten a dime

Especially when we all knew this was going to happen anyway!!

[barbaro]

^ Yes. Even as a layman, I knew GM is finished.

Why did the gov throw away this money on them? Maybe for "political reasons" because of the all of the inter-related job losses (millions of jobs that will be eliminated from OEMs, suppliers, etc).

The gov had to look like it "tried," perhaps.

Hard to say. We can only speculate.

[TSR2]

Why did the gov throw away this money on them? Maybe for "political reasons

Same with British Leyland / Rover Group, money totally wasted to placate the public, especially near election times,

[peterpan]

Why feel sorry for the bondholders, in the main they knew exactly what the risk was and counted on the Gummint paying out the full price for their shit script, fvckem.

[TSR2]

Why feel sorry for the bondholders, in the main they new exactly what the risk was and counted on the Gummint paying out the ful price for their shit script, fvckem

True that may be so why punish them unfairly ?

Why should the Unions who have benefited from GM and helped in its demise be rewarded with 39%.

[peterpan]

Presumably the bond holders gambled on a Republican victory when the terms would have been reversed, they would get the full wack and the unions would be stiffed solidly,

[TSR2]

^

So why stiff any one group ? all contributed , bit of equality would not go amiss

[lom]

Why should the Unions who have benefited from GM and helped in its demise be rewarded with 39%.

Prolly because it is the workers pension funds and they are prioritized debts.

[barbaro]

Why feel sorry for the bondholders, in the main they new exactly what the risk was and counted on the Gummint paying out the ful price for their shit script, fvckem

True that may be so why punish them unfairly ?

Why should the Unions who have benefited from GM and helped in its demise be rewarded with 39%.

Can you elaborate on the 39%?

I missed this.

Is this a cash payout by the gov (taxpayers) to union members?

[Rural Surin]

GM is a garbage can. It should never have gotten a dime. The sooner, the better.

Indeed. Free and open market. Live and die by the sword. Fvck 'em.....if they don't have decent business practices, they shouldn't be in business. Enough with the long history of bankruptcies, bail-outs, tax breaks, etc. It's multinational corporations as these that are bringing down their respective economies.

[TSR2]

Can you elaborate on the 39%? I missed this.

Its the stake that the unions would own if Obamas idea goes thru, in compensation for the missing $27 bill owed by GM to the Unions Trust

[passengers]

Why all the fuss now? Seems to have been predicted on TD a year ago:

https://teakdoor.com/us-domestic-issu...tml#post669892

[TSR2]

Why all the fuss now? Seems to have been predicted on TD a year ago:

Who,s fussing ? just watching the Play come to an end!

[mrsquirrel]

Who,s fussing ? just watching the Play come to an end!

See my thread from this time last year

[passengers]

Who,s fussing ? just watching the Play come to an end!

See my thread from this time last year

You mean this one here:

https://teakdoor.com/us-domestic-issu...tml#post678652

?

That will be the one that was copied'n'pasted from the link I quoted, allbeit it took you a week to do it...

[sabang]

Chapter 11 seems to be the best way out to force the recalcitrant bondholders into line. Seems to have worked with Chrysler, but GM is a whole lot bigger. The last thing the country, outside investors and GM employees want is a protracted legal morass. Chapter 11 is the best gun to the bondholders head, basically. Let them moan.

Fiat is taking a big gamble here in my books- Daimler Benz got caned when it took on Chrysler. But hey, not my money- and surely good news for Amerka.

[Jet Gorgon]

^ Recalcitrant bondholders? Ya, I'd be fekin recalcitrant too if this is the deal:

Bondholders are being asked to exchange $27 billion of debt for 10 percent of General Motors' stock while the Obama administration has loaned GM $14.5 billion and gave the Detroit automaker until June 1st to come up with a plan.
5555
Let's see, GM's mkt cap today was just a notch above $879 MILLION, so 10% of that is $87.9 MILLION in shaky shares (closed today at $1.44 but down to $1.30 in after hours) in exchange for $27 BILLION in debt owing them by GM? And the union's healthcare trust is gonna get 50 cents on the dollar plus a chunk of the restructured co.? 555555555

The govt keeps this sh*t up and NOBODY is going to lend the Treasury or any US cos. any money unless they jack up interest rates. And even then, investors will still be wary, coz the govt via its "prepackaged" bancruptcies could waltz in anytime and tell the bondholders to FO. Big mistake.

GM CEO tells bond holders 'take the deal' or else and yahoo finance -- GM

[sabang]

The name of the game is survival Jet, and sure Bondholders and Stockholders take a bath- so do the Unions for that matter through their healthcare funds. Investors have gotten spoilt over the last couple of decades- the plain fact is, when the poo hits the fan they're in the firing line. The US government ain't gonna Nanny them out of this one- they took the risk, they take the Hit. Thats the Free Market, eh Jet?

Will GM survive? short term probably, but longer term it comes down to if Fiat can turn them around.

[Butterfly]

They expect the other car manufacturer that went bankrupt a few months ago to emerge for bankruptcy by August,

Euros have a misunderstanding of what Bankruptcy Chapter 11 really means in the US, hence some confusion being promoted by the like of bkkandrew who incidentally claim to be proficient in Bankruptcy Laws (a role only a bankruptcy lawyer could fulfill)

Should GM go into bankruptcy so it has to time re-organize and clean up the books ? probably the only solution now, unless a group of investors come to the rescue

[sabang]

Yeh, Chapter 11 is 'Reorganisation' rather than outright Liquidation.

[Jet Gorgon]

^ This one is a "prepackaged" bankruptcy, so creditors got sh*t chance to argue their case or go for liquidating assets to get their cash. Obama has already called angry bondholders "speculators". (I wonder if he calls China a speculator for holding T-bonds?)
The frightening thing is that union healthcare trusts are getting way more back on the buck than the creditors. For this reason, cos. are going to face really tough times attracting debt investors if the govt is going to play "at my whim and fancy" about who gets paid out first when a co. goes t*ts up.
Get the bladdy govt out of business.
And why isn't this in Issues?

[sabang]

Employees are senior Creditors to Bondholders, and the most senior Creditor of all is the US government. So who's gonna call the shots? The fact is, Obama could screw them over more than he's doing- and a true Libertarian would argue that he should.

Depends when you bought GM Bonds I guess- old bonds may have been bought back when GM was actually Blue Chip- but most Bonds are owned by speculators. They bought on the 'too big to fail' hypothesis and they were partly right- but they failed to take into account that a company can survive as an operating entity by going into receivership, and throwing out it's Stock and Bondholders.