|From WebSurfinMurf's Financial Blog|
The government has worked with GM and UAW and has reached an approach to bankrupt GM. The estimated effective date will be sometime in June.
The stockholders in effect will be wiped out, getting a fraction of a cent on the dollar. The bold holders who typically get to negotiate with bankruptcy judge on the % they get from the company carcass, typically above 10% (25-50%?).
However in this case, no courts, the government has dictated to bond holders 10 cents on the dollar.
I have already ranted once before how unjust the government is being hard-nosed on GM and UAW while giving banks a free pass. If you care to read my over-the-top rant again for fun, click here.
So today marks a real turning point in America, the "pinnacle" of worker power over the industry, GM and UAW are turning over a new leaf. It remains to see what this looks like after the dust settles.
If your a stock holder of GM, better set your shares to sell at 7:30 am at any price you can get.
If your a bondholder of GM. Sorry to hear that. This includes your pension funds, banks, and 401k fixed income funds.
To read more, check out Karl of Market Ticker, Mish Global Economic Trend, and various news sources.