The Jury Talks Back


GM’s Special Bondholders

Filed under: Uncategorized — Kevin M @ 8:34 am

“All animals are equal, but some animals are more equal than others.”

— George Orwell, “Animal Farm”

Some GM bondholders own $27 billion in secured bonds.  The administration’s negotiators are offering them 10% of GM’s stock in exchange.  Another set of bondholders hold $20 billion in bonds, identically secured.  They are being offered 39% of GM’s stock and $10 billion in cash.

The difference?  The favored group happens to be the UAW, as the result of their negotiations with the Obama administration.  The private bondholders are offered the scraps that the union left.  Of course, if GM goes into bankruptcy, this deal is off the table.  Since it will require 90% of the bondholders to agree — something that looks unlikely considering the imbalance in the offer — bankruptcy seems all but certain.

So, when GM goes into liquidation, amid all the wailing about the lost jobs, the failing economy in Michigan, greedy banks and GM’s horrible management, remember: This could have been avoided.  They just had to give all parties a fair deal, and they didn’t.

UPDATE:  Sometimes this article disappears behind the WSJ subscriber barrier (but Google GM bondholders unfair).  The relevant portion:

Earlier Monday, GM announced an exchange offer for $27 billion of its unsecured bonds. The exchange will commence only if 90% of bondholders agree to the terms. If GM fails to get adequate participation, it will file for bankruptcy protection.

These terms are “neither reasonable nor adequate,” the bondholders’ committee said. Those who own more than $27 billion of GM bonds would only receive 10% of the restructured company and “essentially no cash,” the statement said. Meanwhile, the union, which has the same legal rights as the bondholders and has $20 billion in obligations, would benefit more – 50% recovery in cash and a 39% stake in the new company, according to the statement.

“We believe the offer to be a blatant disregard of fairness for the bondholders who have funded this company and amounts to using taxpayer money to show political favoritism of one creditor over another,” the statement said.

Keep Watching the Skies!

Filed under: Uncategorized — fat tony @ 8:17 am


Recalling events that occurred when President Barack Francis Xavier Obama was
only forty, several planes paraded through downtown Manhattan today, glorious
against a cerulean backdrop. One of Dear Leader's transports, trailed by two
disarmed F-16s!! Glorious! A picture perfect commemoration of His first one hundred days of rule!!

Thousands of subjects took to the streets to be part of this great historical
moment. Eschewing elevators, they ran down dozens of flights, screaming
rapturously. Many spontaneously gathered on the shores of the Obama (formerly, the Hudson)
River, the better to see the expected fireworks display of national pride and

Sadly, what should have been an image inspiring a national coming (together) was
spoiled when certain reactionary elements and their EastAsia overlords attempted to
foment panic. Not content with their financial manipulations that have bled
us dry (and the "teabagging" spectacle so sparsely attended last week) this parasitic class now pretends to fear the mere sight of a 747 flying
two full wingspans from the heart of the cabal, accompanied by fighters from the
palace guard. They will stop at nothing in their attempts to regain power. Soon they will have real cause to fear! 

New York City proved yesterday that it is no longer the provincial town of eight
years B.O. Cosmopolitan and internationalist now, the populace celebrates its
redemption! As Indonesia-raised Obama hurtles planes through the skies of our
great cities while the people scream, we assert that no more glorious
metaphor exists!! Soon, whole world will hear from us!
Honeymoon's over, Mr. President.

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