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Politics : American Presidential Politics and foreign affairs -- Ignore unavailable to you. Want to Upgrade?

To: TimF who wrote (35707)	6/2/2009 12:39:47 PM
From: DuckTapeSunroof	Read Replies (1) \| Respond to of 71588

Note: The GM bondholders are not 'secured creditors'. (Unlike some of the Chrysler ones). And (legally speaking) 'secured' is not the same thing as 'senior'. The assets 'securing' most of the loans would be next to totally worthless (other then scrap value) if the government did not come in with it's $50B in new investment (because there are no other bids from anywhere in the world)... and whatever minimal value the securing assets may have would be dwindling rapidly away day-by-day were the bankruptcy process to be delayed or dragged-out. (Meaning that 'security' would be evaporating, it is almost totally illusory at this point....) In chapter 11 federal bankruptcies the judge is tasked with slashing the company's debt load... but doing so in a manner so as to craft a viable enterprise. That is the court's one primary concern, all others are further back in it's consideration. In chapter 11s seniority is frequently reshuffled by the Court (as this one study indicated: 78% of the time it is), in an attempt to maximize the new enterprise's chances for survival. (And, damn... who would'a thunk it --- the filing reveals that GM had much more then twice as much debt on it's books as assets. They have been insolvent for a LONG time.) ================================= GM in bankruptcy court. Bankrupt General Motors (GM) won court approval to auction its assets, with the lead bid coming from the Treasury and the goal of closing a sale in July. GM was also approved to borrow $15B of a planned $33.3B bankruptcy loan, and asked for permission to void seven corporate jet leases. The bankruptcy filing showed GM has more than 100,000 creditors and has debt of $172.8B, more than twice its assets. The automaker plans to launch a new company in 60-90 days, while the court supervises the sale or liquidation of unprofitable brands. GM said it reached a tentative deal with an undisclosed buyer to sell its Hummer brand at an undisclosed price.