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Wednesday, June 3, 2009

GM Bankruptcy, review

I just saw in my post from April 30 that I thought GM's bankruptcy would get the government out of their management at last.


The US government now owns 60% of General Motors. (Or Government Motors, whatever.) And Canada gets 12.5%. The UAW (United Auto Workers union) gets 17.5%.

And the bondholders, the people who were originally guaranteed by bankruptcy law to get at least their principal back, those who didn't take risk, those who needed stable investments, like school, fire department and police department pension funds, will get the remaining 10%, mere pennies on the dollar.

Stockholders get zip. Preferred stockholders (retirees living on a fixed income from dividends) get zip. Common stockholders (holding them as they split and increase value over time) get zip.

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