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

To: Wyätt Gwyön who wrote (43333)	10/12/2005 12:24:14 PM
From: redfish	Respond to of 110194

Exactly if GM files 11 the debtholders will do a cramdown, equity won't even have a seat at the table. You don't get to vote on the reorg plan if it provides you with as much or more than you would get in a liquidation. Existing common gets cancelled and new common gets issued to new shareholders. To the extent equity got anything at all, say some warrants to buy the newly issued GM stock, it would be due to the kindness of the hearts of debtholders. The more layers in the capital structure the more unlikely the common is to wind up with anything at all.