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Non-Tech : General Electric (GE) -- Ignore unavailable to you. Want to Upgrade?

To: Bonefish who wrote (2982)	12/8/2018 10:45:19 AM
From: E_K_S	2 Recommendations Recommended By Lance Bredvold SirWalterRalegh Read Replies (1) \| Respond to of 3256

Please explain? Both have/had huge unfunded pension liabilities. The only way to transfer those off the balance sheet is to do a structured BK and transfer the remaining pension liabilities to the Gov backed organization (ie. Pension Benefit Guaranty Corporation ) Several large legacy airlines have filed for bankruptcy reorganization in an attempt to renegotiate terms of pension liabilities. These debtors have asked the bankruptcy court to approve the termination of their old defined benefit plans insured by the PBGC. Although the PBGC resisted these requests, ultimately it assumed the plans. NOTE: What Happens to the GM Pensions in Bankruptcy? GM had about $100Bln in Pension obligations; GE has around $34Bln. The PBGC option does not elliminate pension obligations but rather allows the obligations to be renegotiate the amount that is paid in the future. GM had only funded their $100Bln liability by 20% (ie $20Bln) but were able to structure future pay outs to beneficiaries at a lower rate using the structured BK option and transfering those remaining pensionobligations to the PBGC. GE has been able to transfer some of their pension obligations along to the buyers of the different asset sales but this is small (<20%) when you look at the total obligations $34Bln. I just do not see any other way to dispose of these obligations (liabilities). There is a much larger risk now in buying the common shares w/ the possibility they go to a $0.0/share value if/when a structured BK is done. GE will survive w/ new GE shares but the old GE shares get wiped out. I think the GM analogy is spot on when you look at this from the view of resolving the unfunded pension liabilities. Look how fast GM did their structured BK and when the 'new' GM shares were issued and began trading. It was less than 30 days. I think that also explains the very large option activity on Puts and Calls. I would only own the common shares if I bought a PUT to protect the down side to $0.00/share if a structured BK was done. Then I might even sell some covered Calls on a portion of my shares to help pay for my long term out of the money Put. If OI starts to expand at the long end of the PUT market, that would be a sign that common shareholders are buying protection. I currently do not see that so out to 1/2020 it still looks safe (ie $3.00 strike price relatively low OI). Just food for thought but expect the unexpected especially if it may/could be one of the Exit Strategies. Good Investing EKS