GM Losers: 30 Shareholders That Could Get Hurt By Bankruptcy

usnews.com:

If General Motors declares bankruptcy, some of its investors--including bondholders, other secured lenders, and the U.S. government--are likely to get a portion of their money back. But stockholders, with virtually no protections, will be essentially wiped out.

To gauge who stands to lose the most, we obtained a list of GM's biggest shareholders from research firm Thomson Reuters.

Read the whole story: usnews.com

Comments

[Carolab]

The bondholders actually have NO incentive to prevent the bankruptcy -- because they don't bear the loss. In fact, they prefer it -- why? Credit Default Swaps:

Credit default swaps (CDS) are now being blamed for playing a role in two bankruptcy filings this week.

The same will occur with General Motors which is now trying to restructure:

The Obama administration has directed General Motors Corp (GM.N) to prepare a new restructuring plan that would pay off bondholders and the automaker's major union in stock in exchange for $48 billion in debt, people briefed on the plan said on Friday.

The GM bondholders who have in total $38 billion credit insurance will certainly not agree to a voluntary shares for debt-reduction swap. Outside of bankruptcy procedures there is little anyone can do to make them accept such. Inside a bankruptcy the insurance makes the whole.

GM and Citigroup will thereby have to go into bankruptcies with all the nasty things that will be involved. Likely more jobs will be lost than necessary and more damage done to the economy as a whole while the bondholders who bought insurance will be perfectly well.

It is weird that the Obama administration and even the smart IRA folks have not grasped the problem that CDS' have created. These insurances by their very existence give an incentive to 'liquidationists'.

Declare all Credit Default Swaps null and void.

http://www.moonofalabama.org/2009/04/how-credit-default-swaps-create-bankruptcies.html

[plebeianswillrevolt]

Don't worry... they are suing the auditors for fraud. It if just a matter of time until they are made "whole" again. Just like AIG using taxpayer money to pay of Goldman's credit default swaps at 100% on the dollar. Don't cry for me Argentina, American finance is as crooked as CEO Lewis and Faud;s teeth,

....anybody else want to join my tar and feather brigade. It will be fun!~

[PhilipTaylor]

Barclays and Bank of New York Mellon are part of the Big Banks that created this CRISIS!

The other two may be victims but not the two above! Both Big owners of the FED!

[duckfan00]

And dont forget that many of the bonus babies from Lehman are now working at these two banks and will soon be back to the same old greedy business tactics as usual....

[Dystopic]

Investments by nature are risky. They enjoyed the profits, they must now suck it up thru the losses.

Don't invest what you cannot afford to lose.

[JScott]

Can't feel sorry for them.

[MayorQuimby]

Where's the BUTTHEAD that called me an ass for speaking of GM bailouts as us GIVING GM money?

Come out, come out....

From Reuters:

(Reuters) - General Motors Corp's bankruptcy plan includes the sale of healthy assets to a new company, owned by U.S. government, a source said on Tuesday.

* Plan calls for U.S. to extend credit line to new company; Treasury to forgive bulk of $15.4 billion of loans: source

[Dystopic]

Lotta buttheads here, you have to be more specific.

[Peter007]

It's a way of transferring taxpayers money to Union workers without anyone noticing. The money given to GM was funneled straight to employees that were still working. Congress knew it wasn't going to be paid back. It was a payback for votes that democrats got in the last election.
Paying for votes with taxpayer money. Its so American.

[verticallychallenged]

1) Last I checked, union members usually are also taxpayers;
2) Those of us who are public employees who belong to a union are also taxpayers; i.e., we pay for part of our own salaries;
3) Take a look at how many companies are listed - public employee pensions, and financial companies that are part of many other taxpayers' 401Ks, pension plans, ... ordinary, hard-working, taxpaying Americans.

[nomadicexpat]

these are all asset managers and in most cases they are index managers. this is such a non story, it just highlights how sensationalist this board is

[sc300nc]

sometimes you win, sometimes you lose. That's the market for you. If the companies were properly diversified, which I'm betting they are, they can handle this setback.

[research]

These companies were bailing out by TARP 's payment of investment insurance claims.

These companies have CDS investment insurance even now on the bonds.

The stand to make more money from TARP than from the success of the company,

So they WANT bankruptcy. They are the ones forcing it.

This is deception.

[vagabondvet]

Credit default swaps would not be an issue if companies who overextend themselves to issue them were allowed to fail (AIG).

Nothing is forcing GM into bankruptcy except their inability to sell cars. GM had a negative net equity of $86 billion at December 31, 2008 http://finance.yahoo.com/q/bs?s=GMM), which was $30 billion lower than 2007, and earnings for this year are still bad at -$6 billion for Q1 2009. It's intellectually lazy to blame bankruptcy on companies holding credit default swaps.

[JoeBlough]

Somebody has to eat it. That's the way investments work.

[notAMoron]

TIAA-CREF
New York State Teachers' Retirement System
Florida State Board of Administration
California Public Employees' Retirement System

What do you want to bet that the rest of the states didn't make the list because they aren't as large as NY, CA, and FL?

[notAMoron]

Stick it to those dirty hedge fund dogs... Oh wait those are just mutual fund companies which the average american investor probably own...

Stick it to the average american investor

[KillTheMessenger]

GM stock has a residual value of $781 million, that's about as much as GM burns through in a couple of days. Nobody cares about stock holders. They are completely irrelevant.

[Dystopic]

agreed, they should be out of the picture, licking their wounds after making such bonehead decisions.

[kelo]

They may lose their money but probably most will still have a job. What about those employees that worked for the car manufactures who were supposed to take care of them. That what happens when corporation over borrow and pay excessive salaries. Then this investments companys have nothing but greed on their mind. The people running this investment wont get hurt only the ones who put their money with them.

[notAMoron]

"What about those employees that worked for the car manufactures who were supposed to take care of them."

Pro-tip: When going on a job interview and your prospective employer asks you why you want the job don't say that you are looking for someone to "take care of you."

[BeyondGoodAndEvil]

GM will declare bankruptcy. It's just a matter of time.

[Dystopic]

Wow! Prognostication on the HuffPo!!