Excerpts from the NY Times of 27 Apr 2009:
Quote:
G.M.’s Latest Plan Envisions a Much Smaller Automaker
G.M. said it would have to file for Chapter 11 bankruptcy protection unless 90 percent of the vast bondholder group accepted the terms by June 1. ...
If bondholders approve the debt-for-equity exchange, they would own about 10 percent of G.M., making them a minority shareholder in a company controlled by the Treasury and the U.A.W.’s retiree trust. ...
Representative Thaddeus McCotter ... is urging the Treasury secretary, Timothy F. Geithner, to disclose which G.M. bondholders have default swaps from the American International Group, the insurance company that was bailed out by the government.
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As if these stories don't get complex enough. A new twist. Rather than agree to a swap of bonds for common stock, many bondholders with Credit Default Swaps from AIG can do better if GM goes bankrupt.