34
   

Let GM go Bankrupt

 
 
parados
 
  1  
Reply Tue 24 May, 2011 04:50 pm
@hawkeye10,
hawkeye10 wrote:

Used to be they always did, [/quore] Really? When did judges have the time to look at the books of a company and come up with a plan for bankruptcy? I'm just curious because I can find no time when judges created the plans.

0 Replies
 
parados
 
  3  
Reply Tue 24 May, 2011 04:52 pm
@parados,
parados wrote:

Quote:

No, Obama screwed them permanently, had the case been run according to bankruptcy law they would have had delayed payments, and still would have taken a bath, but they would have gotten much more than the few cents on the dollar that they got.

Let's start with your "few cents on the dollar" claim.. What do you mean by "few cents"?

You still haven't provided us with the most basic of info to back up your claims hawk.
hawkeye10
 
  -2  
Reply Tue 24 May, 2011 05:22 pm
@parados,
Quote:
You still haven't provided us with the most basic of info to back up your claims hawk.
You know how to research correct??
Quote:
Based on where GM’s bonds trade, the company is worth about $53 billion right now.(aug 2010)

http://www.businessweek.com/autos/autobeat/archives/2010/08/doing_the_math_on_obamas_detroit_bailout.html
Bond bonders got 10% of the company so the value is $5.3 billion. Before bankruptcy they held $27 billion in GMC bonds
Quote:
According to GM's filing, advisors to the unofficial committee of major bondholders which accepted the deal hold about 20% of $27 billion in unsecured bonds
Quote:
According to Thursday's filing, the new offer is structured so that the portion of GM that would remain in bankruptcy would receive a 10% stake in a "new GM" that would be used to pay bondholders. The old GM would also receive the right to buy the 15% stake in the new company that emerges from bankruptcy.

The bondholders would likely receive the overwhelming majority of the old company's assets, including the shares in the new company, as part of the bankruptcy process.

In the original offer to bondholders, creditors would only receive a 10% stake in a new GM


http://money.cnn.com/2009/05/28/news/companies/gm_bondholders/

There is almost no value in old gm other that its stake in new GM, because almost of that crap will be dismantled as no one wants it.

5.3/27 = 20 cents on the dollar.

And that does not even count that new GM has since diluted the post bankruptcy stakeholders by issuing new stock. I have seen estimates that have the deal worth 12 cents on the dollar now, plus what ever they can make with their rights to buy 15% of the new GM.
parados
 
  4  
Reply Tue 24 May, 2011 08:40 pm
@hawkeye10,
To begin with..

Your calculation is 20 cents on the dollar which isn't terrible in a bankruptcy.
Lehman paid about 10-14%
Worldcom paid 5 billion on 30 billion in debt.

Clearly, the bondholders weren't guaranteed more in a normal bankruptcy. They could well have received less.

But wait....
The bondholders didn't only get 10% of the company, they also got warrants for another 15% which based on the recent price of the stock means they will get about 30- 40 cents on the dollar for their bonds.
http://www.bloomberg.com/news/2011-04-06/old-gm-bondholders-getting-shares-in-new-general-motors-may-depress-price.html
hawkeye10
 
  -2  
Reply Tue 24 May, 2011 08:54 pm
@parados,
Quote:
hey also got warrants for another 15% which based on the recent price of the stock means they will get about 30- 40 cents on the dollar for their bonds.
That 15% was a right to buy at offering, which was priced at $33 a share, it is now trading just above $30.....this was an opportunity to lose more money it would seem.
parados
 
  5  
Reply Wed 25 May, 2011 05:27 am
@hawkeye10,
Quote:
One set of warrants covering 136.4 million shares has an exercise price of $10 with an expiration date of July 10, 2016. The other set of warrants covering 136.4 million shares has an exercise price of $18.33 with an expiration date of July 10, 2019.


From The Detroit News: http://detnews.com/article/20110419/BIZ/104190352/GM-stock-hits-new-low#ixzz1NMXfLMLF


No, just another opportunity for you to give out faulty information to support your faulty premise it would seem.
hawkeye10
 
  0  
Reply Wed 25 May, 2011 12:23 pm
@parados,
Great, so before GM diluted them, and assuming that they did the full exercise of the warrants, and assuming that the bond holders do not need to pay any of the site cleanup costs at all of the plants that need to be dismantled the bond holders got 35 cents on the dollar at todays stock price.
Cycloptichorn
 
  2  
Reply Wed 25 May, 2011 12:37 pm
@hawkeye10,
hawkeye10 wrote:

Great, so before GM diluted them, and assuming that they did the full exercise of the warrants, and assuming that the bond holders do not need to pay any of the site cleanup costs at all of the plants that need to be dismantled the bond holders got 35 cents on the dollar at todays stock price.


And they were ******* lucky to get ANYTHING at all. Bondholders are unsecured creditors. They have no inherent right to get anything.

Cycloptichorn
hawkeye10
 
  0  
Reply Wed 25 May, 2011 12:45 pm
@Cycloptichorn,
Quote:
And they were ******* lucky to get ANYTHING at all. Bondholders are unsecured creditors. They have no inherent right to get anything.
as are the pensioners, who so far have not taken a haircut at all but for the ones who got spun off in Delphi, who are now taking roughly 40% cuts.
Cycloptichorn
 
  3  
Reply Wed 25 May, 2011 01:07 pm
@hawkeye10,
hawkeye10 wrote:

Quote:
And they were ******* lucky to get ANYTHING at all. Bondholders are unsecured creditors. They have no inherent right to get anything.
as are the pensioners, who so far have not taken a haircut at all but for the ones who got spun off in Delphi, who are now taking roughly 40% cuts.


Totally and 100% wrong. Check the article below - many exec. pensioners have taken a direct hit and the rest of them face the possibility of doing so, if GM can't cover their costs.

Yaknow, it's abundantly clear in this conversation that you don't know anything at all about the facts of this case. Parados has been straight-up embarassing you with these corrections to things you say, upon which time you move the goalposts farther and farther every time....

http://www.reuters.com/article/2011/05/11/gm-pensions-idUSN1118638920110511

http://www.usatoday.com/money/autos/2009-06-02-gm-retirement-benefits_N.htm

At what point do you admit that you are arguing an ideological point, and not one built up from facts?

Cycloptichorn
mysteryman
 
  0  
Reply Wed 25 May, 2011 01:24 pm
@Cycloptichorn,
Quote:
Those who opposed the gov't bailout of Chrysler and GM were totally wrong. Couldn't have been more wrong.

Cycloptichorn


That depends on WHY they opposed it.
I opposed it, but not for the reasons some others did.

I oppposed it because IMHO it set a bad precedent.
The govt said that GM was "to big to fail", so they bailed them out.
Now, any company can use that as a reason to demand, and get, govt bailouts.

And how do you define "to big to fail"?

The mom and pop store on the corner is to big to fail, according to the employees there.
Rayloc here in Morganfield had over 400 employees, yet they failed.
Werent they also to big to fail?

If a company cant make money, due to its own mismanagement and its own faults, its not up to the govt to bail them out.
Its up to the private sector and the company to get themselves out of the mess they put themselves in.

I'm glad that GM paid back the money and turned a profit, but they should have done it on their own, and not without the govt saving them.
Cycloptichorn
 
  2  
Reply Wed 25 May, 2011 01:26 pm
@mysteryman,
Quote:

Now, any company can use that as a reason to demand, and get, govt bailouts.


False assertion here. If we aren't in the middle of a financial crisis, NO company is 'too big to fail.' It's only when there's crisis everywhere that we run into these problems.

Cycloptichorn
0 Replies
 
hawkeye10
 
  0  
Reply Wed 25 May, 2011 02:00 pm
@Cycloptichorn,
Quote:
Totally and 100% wrong. Check the article below - many exec. pensioners have taken a direct hit and the rest of them face the possibility of doing so, if GM can't cover their costs.
A small number of execs took a pension hit, they were singled out for harsh treatment. According to the suit they were also lied too. I dont have a lot a pitty for them but honesty is a requirement, and all workers should have taken a hit to their pensions, they should join in the sacrifice. I happen to believe that GM will eventually go through bankruptcy properly, and that the everyone will take huge hits as the government takes over the plan, but that does not excuse the lack of fairness in the Obama plan.
Cycloptichorn
 
  3  
Reply Wed 25 May, 2011 02:01 pm
@hawkeye10,
Frankly, I feel perfectly comfortable saying that you don't know enough about the situation to decide what's fair and what isn't, as you've been shown to be wrong on pretty much every point of the bailout and bankruptcy. Why should anyone care what your opinion is?

Cycloptichorn
hawkeye10
 
  -1  
Reply Wed 25 May, 2011 02:08 pm
@Cycloptichorn,
Cycloptichorn wrote:

Frankly, I feel perfectly comfortable saying that you don't know enough about the situation to decide what's fair and what isn't, as you've been shown to be wrong on pretty much every point of the bailout and bankruptcy. Why should anyone care what your opinion is?

Cycloptichorn
Feel free to document that I am wrong, which of course will not happen because you are too lazy, you would rather throw sand than do the work to try to prove your point.
Cycloptichorn
 
  2  
Reply Wed 25 May, 2011 02:21 pm
@hawkeye10,
Why should I bother re-doing Parados' work? This thread IS the documentation that you've been wrong on most issues related to this bailout. Re-read the last two pages and see just how many times you've uttered falsehoods, only to have him or I point out to you that what you are saying is incorrect.

Cycloptichorn
0 Replies
 
H2O MAN
 
  0  
Reply Wed 25 May, 2011 02:26 pm
Detroit is a model democrat city that Obama and his motor company should be proud of, it symbolizes everything that Obamanomics is bringing to the rest of the country. Detroit is Obama's highest achievement thus far.
hawkeye10
 
  0  
Reply Wed 25 May, 2011 02:47 pm
@H2O MAN,
H2O MAN wrote:

Detroit is a model democrat city that Obama and his motor company should be proud of, it symbolizes everything that Obamanomics is bringing to the rest of the country. Detroit is Obama's highest achievement thus far.
I am sure that you are especially impressed with how GM takes their tax holiday and converts it into "profits", which Obama then uses to claim that he was right to believe in GM. That is rich, I tell you.

Meanwhile, the capitalists dig into the latest GM numbers and notice that the costs in North American operations are way above what was expected, call the GM execs on it, who then respond, "ya, we need to do a better job of cost containment"...some things never change. For damn sure we are very far away from knowing that Obama was right. That did not stop Obama from declaring "mission accomplished" though......nor keep the idiot Cycloptichorn from paroting him.
parados
 
  2  
Reply Thu 26 May, 2011 07:17 am
@hawkeye10,
hawkeye10 wrote:

Great, so before GM diluted them, and assuming that they did the full exercise of the warrants, and

So.. why would you not exercise a warrant for $10 when the stock price is $30?
Should we assume that the bondholders WANT to lose money?

Quote:
assuming that the bond holders do not need to pay any of the site cleanup costs at all of the plants that need to be dismantled the bond holders got 35 cents on the dollar at todays stock price.
I guess we can assume you don't know what you are talking about since those facts are all there in the bankruptcy filings. Bond holders are not responsible for the clean up costs. The assets of the company are to pay for clean up along with Federal superfund dollars. It's all laid out in the documents.

GM was divided into 2 companies. Bondholders got 100% of one company which has to pay clean up costs and 10% with another 15% in warrants of the other company. The ownership in the one company have nothing to do with the ownership of the other once the 2 companies were formed. Bondholders are not responsible for costs beyond the assets of the first company. You don't seem to understand how bankruptcy works hawkeye. Why would someone owed a debt by a company get nothing and have to pay money on top of that? This shows how ignorant your argument is.
0 Replies
 
parados
 
  2  
Reply Thu 26 May, 2011 07:20 am
@hawkeye10,
Quote:

I am sure that you are especially impressed with how GM takes their tax holiday and converts it into "profits", which Obama then uses to claim that he was right to believe in GM. That is rich, I tell you.

A tax holiday?
What the hell are you talking about?
I think we covered this one months ago. Companies are entitled to write losses forward against future taxes. You are now complaining that the company is writing off loses that they would have been able to write off if they hadn't gone into bankruptcy. You are acting like a lunatic.
 

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