What is going on in this country? The government is about to take over GM in a plan that completely screws private bondholders and favors the unions. Get this: The GM bondholders own $27 billion and they’re getting 10 percent of the common stock in an expected exchange. And the UAW owns $10 billion of the bonds and they’re getting 40 percent of the stock. Huh? Did I miss something here? And Uncle Sam will have a controlling share of the stock with something close to 50 percent ownership. And no bankruptcy judge. So this is a political restructuring run by the White House, not a rule-of-law bankruptcy-court reorganization.
Tuesday, April 28, 2009
UAW to take over GM
Larry Kudlow is not impressed.
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Even better, bondholders are owed $27 billion and a 10% share of GM is worth $125 million, less than 1 cent on the dollar. The bondholders will force GM into bankruptcy.
ReplyDeleteLazy Libertarian