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GM bankruptcy expected as bondholder offer fails

From the article it appears the bondholders. Apparently these people do not believe in losing in the market. They want their cake and everybody elses.
 
They'll extend the date until the beginning of June, probably. But it will file bankruptcy.
 
From the article it appears the bondholders. Apparently these people do not believe in losing in the market. They want their cake and everybody elses.

That or the fact that they are first in line and they are getting pushed to the back and screwed in favor of a UAW payback.
 
That or the fact that they are first in line and they are getting pushed to the back and screwed in favor of a UAW payback.

Not according to the article. It states that they are being offered much more than the UAW and the government.
 
Few took the company up on its bond-exchange offer, making bankruptcy very likely within the next week. The government could receive as much as a 70% stake in the company.

GM bankruptcy expected as bondholder offer fails - Los Angeles Times

Are we bailing out GM or the bond holders?

A better question is what happened to all the rhetoric from Obama how he is NOT going to let this industry fail while dumping billions into it?

The hysterics from the Obama administration roll on. Hey, what about them 5 million new high paying jobs Obama promised? Where did they all go?

If my math is correct, since he took office the economy has shed over 6 million jobs so that means that in order for him to hold to his empty campaign rhetoric which a gullible voting public swallowed like pigs at the trough, he needs to now create 11 million jobs.

:2wave:
 
From the article it appears the bondholders. Apparently these people do not believe in losing in the market. They want their cake and everybody elses.

Your uniformed populist rhetoric aside; the Bondholders didn't like the deal because the UNIONS would have a bigger share without any investment than they would with the newly restructured company. Can't say that I blame them.

GM's proposal would give bondholders a 10% stake in the automaker, even though they currently own about 40% of the company's debt. The Treasury would get about a 50% stake in GM.

Under both plans, the UAW would receive about a 40% stake in the company.


GM's clock is ticking down - May. 22, 2009

Yeah, that sounds like a GREAT deal to me. What a shocker that they would question such an asinine offer. :rofl
 
Your uniformed populist rhetoric aside; the Bondholders didn't like the deal because the UNIONS would have a bigger share without any investment than they would with the newly restructured company. Can't say that I blame them.

GM's proposal would give bondholders a 10% stake in the automaker, even though they currently own about 40% of the company's debt. The Treasury would get about a 50% stake in GM.

Under both plans, the UAW would receive about a 40% stake in the company.


GM's clock is ticking down - May. 22, 2009

Yeah, that sounds like a GREAT deal to me. What a shocker that they would question such an asinine offer. :rofl

Misread the article, my bad, it was the reverse of what I originally thought it said. Rather the Union and government are getting the better end of the deal.
 
Your uniformed populist rhetoric aside...

Why is the term "populist" a negative. Isn't the government supposed to serve the people.

pop·u·list (ppy-lst) KEY

NOUN:

A supporter of the rights and power of the people

Oh, I forgot, you only support corporate rights and profits over people.
 
Your uniformed populist rhetoric aside; the Bondholders didn't like the deal because the UNIONS would have a bigger share without any investment than they would with the newly restructured company. Can't say that I blame them.

GM's proposal would give bondholders a 10% stake in the automaker, even though they currently own about 40% of the company's debt. The Treasury would get about a 50% stake in GM.

Under both plans, the UAW would receive about a 40% stake in the company.


GM's clock is ticking down - May. 22, 2009

Yeah, that sounds like a GREAT deal to me. What a shocker that they would question such an asinine offer. :rofl

I heard earlier today the UAW is willing to take less of stake. The whole thing is a very hard situation since so many retirees are involved on all ends.
 
Let them die off.
 
That or the fact that they are first in line and they are getting pushed to the back and screwed in favor of a UAW payback.

I am not an expert on this, but as some one who works(when not laid off as now) in the auto industry I have been following all this pretty close. The above quoted is not accurate. It's close, but fails on a technicality. The governments agreement to give money to the unions is a separate deal outside of the restructuring agreement. Basically, the government is paying off the UAW for their agreement.

Also, not that the hedge funds that are involved in this and rejecting the deal are acting as they tend to in these cases. They make more money from bankruptcy, so tend to hold out and not settle. Something wrong with the system there.
 
I'm pumped, because if this actually happens, it means my friends at the law firms handling the bankruptcy will definitely have jobs come this fall.

There's 3 jobs "created or saved," just 3,999,997 more to go...
 
Also, not that the hedge funds that are involved in this and rejecting the deal are acting as they tend to in these cases. They make more money from bankruptcy, so tend to hold out and not settle. Something wrong with the system there.

That's how bankruptcy law is designed to work - what's wrong with that?

If those protections were not available, people would be reluctant to invest in the first place. Strong investor protections are the hallmark of an stable and secure economy.
 
That's how bankruptcy law is designed to work - what's wrong with that?

If those protections were not available, people would be reluctant to invest in the first place. Strong investor protections are the hallmark of an stable and secure economy.

Ok, I know for sure you know more on this than me, so maybe you can answer a question for me in this regard: shouldn't the system be that the bondholders benefit more from settling outside of bankruptcy, than in bankruptcy? It seems that the system as is is designed such that bankruptcy becomes almost an inevitability, since the bondholders have no incentive to avoid it, and in fact the incentive is to encourage it. If bankruptcy is a preferred option, why have we tried so hard to keep Chrysler and GM out of bankruptcy?
 
Ok, I know for sure you know more on this than me, so maybe you can answer a question for me in this regard: shouldn't the system be that the bondholders benefit more from settling outside of bankruptcy, than in bankruptcy? It seems that the system as is is designed such that bankruptcy becomes almost an inevitability, since the bondholders have no incentive to avoid it, and in fact the incentive is to encourage it. If bankruptcy is a preferred option, why have we tried so hard to keep Chrysler and GM out of bankruptcy?

We've tried so hard because it was the popular thing to do, because the UAW would be forced into a less... advantageous agreement.

If I invest a million into a company, my money should come before someone who doesn't invest in said company, and further more, if that company is failing, I should get the most of my money back possible.

That's how the world works.
 
That's how bankruptcy law is designed to work - what's wrong with that?

Because all we do is create paper work. I'm an investor not a lawyer BTW.


If those protections were not available, people would be reluctant to invest in the first place. Strong investor protections are the hallmark of an stable and secure economy.

It is workers that create a product to sell from the assembly line worker to the engineer to the designer not the pencil pushers and they the workers creators are the people that are worth long term retirement investments. So IOW I really do not mind what is going on now because we are looking after millions of peoples investments from the mom and pop bond holder to the retired union worker. I really do not want a bunch of 60 to 80 year old people on the bread lines.
 
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First, this isn't my area so don't take anything I say as authoritative (not that anyone should regardless of the area).

shouldn't the system be that the bondholders benefit more from settling outside of bankruptcy, than in bankruptcy? It seems that the system as is is designed such that bankruptcy becomes almost an inevitability, since the bondholders have no incentive to avoid it, and in fact the incentive is to encourage it. If bankruptcy is a preferred option, why have we tried so hard to keep Chrysler and GM out of bankruptcy?

The system isn't really any particular "way" - it is what it is. Whether bankruptcy is better than the alternatives depends on the facts of each particular case and the alternatives available.

In most cases, there aren't really any alternatives. If a company can't find a buyer and can't make ends meet, there is just bankruptcy left. In those cases, there are very particular rules about who gets what. The creditors were aware of these rules when they made their investments, so they knew what they were getting into and what they can expect.

The reason why there's so many alternatives in these cases is because the government has an interest in how the cases turn out, so they're inserting themselves into the process, whether by advocating for a particular division, making promises to various parties, or offering incentives for other companies to come in and purchase assets. The result of this is that the normal rules don't apply. Creditors who normally could have predicted what they would get no longer have any idea. On top of that, they're being outright threatened by the government that if they don't go along with what the government wants, they will be ostracized as "not playing nice" and will get on the ****list, which absolutely nobody wants to be anywhere near nowadays.

It's creating a lot of uncertainty, and is having significant effects on how willing corporations (esp. investment vehicles) are to get involved in anything even tangentially related to the government.
 
Because all we do is create paper work. I'm an investor not a lawyer BTW.

You know there is a lot more to it than that.

An investor is generally another term for creditor. You are loaning them money to expand their business.

It is workers that create a product to sell from the assembly line worker to the engineer to the designer not the pencil pushers and they the workers creators are the people that are worth long term retirement investments.

With out investors they couldn't expand their business rapidly enough to create more jobs for workers to do, expand product lines, etc.

Workers do not own the jobs they do.
 
We've tried so hard because it was the popular thing to do, because the UAW would be forced into a less... advantageous agreement.

If I invest a million into a company, my money should come before someone who doesn't invest in said company, and further more, if that company is failing, I should get the most of my money back possible.

That's how the world works.

I do not think the UAW is why President Bush decided to bail out Chrysler and GM.

If you invest millions in a company, you should certainly be in line to get money back, but if the company does poorly, you certainly should expect to lose money. The system as now has investors who actually benefit from a company failing, which is not a good thing.
 
First, this isn't my area so don't take anything I say as authoritative (not that anyone should regardless of the area).



The system isn't really any particular "way" - it is what it is. Whether bankruptcy is better than the alternatives depends on the facts of each particular case and the alternatives available.

In most cases, there aren't really any alternatives. If a company can't find a buyer and can't make ends meet, there is just bankruptcy left. In those cases, there are very particular rules about who gets what. The creditors were aware of these rules when they made their investments, so they knew what they were getting into and what they can expect.

The reason why there's so many alternatives in these cases is because the government has an interest in how the cases turn out, so they're inserting themselves into the process, whether by advocating for a particular division, making promises to various parties, or offering incentives for other companies to come in and purchase assets. The result of this is that the normal rules don't apply. Creditors who normally could have predicted what they would get no longer have any idea. On top of that, they're being outright threatened by the government that if they don't go along with what the government wants, they will be ostracized as "not playing nice" and will get on the ****list, which absolutely nobody wants to be anywhere near nowadays.

It's creating a lot of uncertainty, and is having significant effects on how willing corporations (esp. investment vehicles) are to get involved in anything even tangentially related to the government.

Thank you for the information.
 
Because all we do is create paper work. I'm an investor not a lawyer BTW.

Create paperwork and uphold the rule of law.

It is workers that create a product to sell from the assembly line worker to the engineer to the designer not the pencil pushers and they the workers creators are the people that are worth long term retirement investments.

And those workers are compensated for their performance with their salaries. If they want more money, they're free to go find other jobs.

You're also implying that the physical laborers are the only ones adding value. If not for the creditors, there would be no way to pay said laborers, nor to grow the business to where it is today.

If a large manufacturer lost half its machine workers, it could keep operating at perhaps a slowed rate. If it lost half its creditors, its doors would close the next day.
 
I do not think the UAW is why President Bush decided to bail out Chrysler and GM.

If you invest millions in a company, you should certainly be in line to get money back, but if the company does poorly, you certainly should expect to lose money. The system as now has investors who actually benefit from a company failing, which is not a good thing.

No investor is making more from the company failing than they would if the company had succeeded. Everyone is taking a haircut on this, the secured creditors most of all.
 
No investor is making more from the company failing than they would if the company had succeeded. Everyone is taking a haircut on this, the secured creditors most of all.

I phrased it poorly. You are correct. However, the investors do stand to make more from the company going into bankruptcy, than from agreeing to the deals outside of bankruptcy.
 
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