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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: carranza2 who wrote (43331)	10/12/2005 12:20:02 PM
From: Wyätt Gwyön	Read Replies (2) \| Respond to of 110194

a BK proceeding in which a work out of GM's debt and other liabilities takes place is definitely possible and perhaps inevitable. i agree. but that is a poor justification for investing in the equity. as you know, the equityholders don't get diak until the bondholders are paid off at par. since the purpose of the workout itself would be to reduce fixed liabilities (including bonds), they would presumably pay off well below par (and they seemed priced for this, imo), which imo means the equityholders would be bagholders.