Monday, July 6, 2009
Sunday, July 5, 2009
"It is unclear whether creditors who objected to the sale will appeal, as happened in Chrysler's case, where the objectors' appeal went all the way to the U.S. Supreme Court, which declined to hear the case."
See the entire article here:
Thursday, July 2, 2009
Mr. Richman said U.S. control over GM made the company's bankruptcy "a historic first attempt at a Chapter 11 nationalization."
See the entire article:
Michael Richman, an attorney from the firm Patton Boggs representing a group of dissident bondholders addressed the judge about "the absence of real choice in the dominance of the government," referring to the U.S. Treasury's role in pushing the bankruptcy process forward.
He said that the Treasury, in imposing it's July 10 "drop dead deadline" was using a "my way or the highway" attitude in refusing to consider alternate means of restructuring.
See the entire story here:
Wednesday, July 1, 2009
Wilson said that one of the "strategic benefits" of a 363 sale, in which the preferred assets of the old GM are transferred to the new GM, is that "consent of bondholders was not required."
Tuesday, June 30, 2009
See the entire article at:
Monday, June 29, 2009
You know what they say for every ten folks that complaint there are 10 that say nothing! Should be interesting. To see if your name is on the objections list, bring up the document, then search by name. I'm there! My 12 page objection was duly given a document number.
Saturday, June 27, 2009
By Nicole Bullock
Published: June 27 2009 03:00 Last updated: June 27 2009 03:00
This weekend, Oliver Addison Parker will board a plane from Fort Lauderdale to New York. Mr Parker, a trial lawyer and General Motors bondholder, is en route to hearings on the company's restructuring to argue his case himself in federal bankruptcy court.
The issue highlights the difficulty individual bondholders face when competing against larger, better connected groups. Top lawyers for GM and the unsecured creditors' committee charge rates of more than $900 an hour.
The high fees and the difficulty of mobilising opposition mean that individuals, including the dealers, have gained publicity and sympathy on Capitol Hill but not so much in bankruptcy court.
The small bondholders, undaunted, intend to continue their challenge. The unofficial committee has been gathering donations through a website to pay legal costs. Michael Richman of Patton Boggs is representing them. They will argue that the fast-track sale is unjustified and push for a traditional Chapter 11 reorganisation, which they believe will give them more balanced treatment with the unions.
"We have enough to fund [the case] through our objections and we are working on funding it beyond that," says Mark Modica, a manager at a Saturn dealership. "We're still in a fight."
Thursday, June 25, 2009
GM Update: Dissident Bondholders Not Backing Down
"Richman will get his chance to question the sales plan starting Tuesday (June 30), when GM and its legal team at Weil, Gotshal & Manges call a number of high-powered executives, including former GM chief executive Fritz Henderson, to the witness stand to testify in favor of the proposed sales plan. Richman say he plans to question them aggressively about the plan."
Tuesday, June 23, 2009
In bankruptcy cases, official committees can have their fees paid for by the bankrupt company rather than having to come up with the money themselves.
The group's lawyer, Michael Richman, of the Patton Boggs law firm, argued that an official committee was necessary because his clients -- many of them retirees and individual families -- had limited means and that the bondholders were a large disparate group.
"Some people think we are insane to be standing in the way of this process, but this is about adequate representation," Richman told the court.
Richman told reporters after the hearing it was "likely" his clients would continue to object to GM's fast track sale, but he was unsure what they would be able to do given their spending limits. Richman said he was planning to meet the official committee of unsecured creditors to see if they would adopt any of the objections his group has raised.
See Also: Judge Shoots Down Plea for Extra GM Bondholders Committee
After the hearing, Richman said he will likely press on with the bondholders' objection to the sales plan, but that he's not sure how the bondholders will pay for continued high quality legal representation. "It's a challenge of resources," he says.
Monday, June 22, 2009
What can you do--write to:
The Honorable Robert E. Gerber
Case No. 09-50026 (REG)
I just spoke with the bankruptcy court, you can still send your objections; include a cover letter indicating your notification was late.
Friday, June 19, 2009
NEW YORK (AP) — A group of General Motors Corp. bondholders and some of the automaker's labor unions filed objections Friday to GM's plan to sell its assets to a new company that can emerge from bankruptcy protection.
Their opposition, along with additional objections filed by consumer groups, a handful of states and cities, and individual retirees, shareholders and bondholders, threatens to put the brakes on what has so far been a speedy trip through the Chapter 11 process.
The Unofficial Committee of Family & Dissident GM Bondholders claim they are being treated unfairly compared with the automaker's other stakeholders and deserve more than the 10 percent stake in the new company that they would receive if the sale goes through.
In its motion, the bondholders group accused GM and the U.S. government of unjustly speeding the case through the bankruptcy process at the expense of the bondholders and dividing the new company's assets "among a few select favored classes." See the entire Associated Press article at:
Interesting the next document filed, Doc. No. 1970, was filed by the U.S. Trustee objection to the motion that the "Unofficially Committee of Family and Dissident GM Bondholders" not be granted official status. GM and the government are fighting with all they have not to allow the small GM bondholders a voice. Hearing is June 23, 9:45 AM.
GM had been doing a good job of neutralizing dissident bondholder groups until May, when the Main Street Bondholders Coalition, which advocates for the rights of GM's thousands of small bondholders, rejected the company's restructuring plan and began pressing Congress to get involved on behalf of individual investors. Additionally an unofficial committee calling themselves "family and dissident GM bondholders" on June 11 sought designation as a formal committee, arguing in a court filing that "there are significant questions about the economic realities" of GM's bankruptcy plan.
See the entire article at:
Thursday, June 18, 2009
In my humble opinion the debtor's arguments are weak and not of significant merit. They misconceive the principles of the law. ( I sound so legal). We shall see what the Honorable Judge Gerber has to say on Tuesday, June 23rd. I am guardedly optimistic the F and D GM Bondholders will become an Official Committee. That's just "speculation" of course and I could be incorrect. For the folks following this saga I hope you feel the sarcasm every time I use the word "speculate or speculation".
"Robinson also determined that the plan didn’t treat all similarly situated creditors equally and thus failed the test proscribing improper discrimination."
It is the same principle the individual Bondholders have been saying all along. The bankruptcy law treats equal creditors in a similar fashion.
"The GM group calls itself the “Unofficial Committee of Family & Dissident GM Bondholders.” Over GM’s objections, the group of dissident GM bondholders won a hearing scheduled for June 23, essentially to change the “Unofficial” part of the name to “Official.” As an official committee, the group would have a role in planning GM’s reorganization.
They have filed documents with the bankruptcy Court. Here are some interesting excepts:
Paul Weiss represents the following parties in interest in their capacities as members of an informal group of holders of certain unsecured notes issued by General Motors (the "Unsecured Notes"), or as managers or advisors to such holders, (collectively, the "Informal Noteholder Group"): Franklin Templeton Investments, Marathon Asset Management, on behalf of certain Funds and Accounts on behalf of certain Funds and Accounts One Franklin Parkway One Bryant Park, 38th Floor San Mateo, California 94403 New York, New York 10036
JMG Capital Management, LLC Eastbourne Capital Management, LLC, on behalf of certain Funds and Accounts on behalf of certain Funds and Accounts 11601 Wilshire Blvd., Suite 2180 1101 Fifth Avenue, Suite 370 Los Angeles, CA 90025 San Rafael CA 94901
The individual members of the Informal Noteholder Group collectively hold approximately $1.6 billion of the Unsecured Notes. Each of the members of the Informal Noteholder Group was a member of the larger Ad-Hoc GM Noteholders Group, which was formed in December 2008. 3. The Informal Noteholder Group has retained Paul Weiss to represent their respective interests in connection with the above-captioned cases.
http://gmcourtdocs.gardencitygroup.com/pdflib/118_50026.pdf (Doc. No 118, filed June 1, 2009)
See the following Document when Western Asset Management was added to the group.
http://gmcourtdocs.gardencitygroup.com/pdflib/316_50026.pdf (Doc. No. 316, filed June 3, 2009)
It will be very interesting to see if they are there to objection to the bondholder deal or to add support to it. I think we will know by the Friday, June 19th filing deadline. This group has $1.6 billion plus the Western Asset Management share which is unknown. This at a minimum represents 6% of the outstanding unsecured bonds.
"The major brokerage firms for a long time pushed GM paper. It was well-rated, and returns were high," said Frankola. "Two years ago, everybody was looking at yields. But two years ago, no one thought GM would be falling into bankruptcy now."
See the article at:
Wednesday, June 17, 2009
"Bondholders thought their retirement dreams were safe. After all, they had bought bonds, not stocks. "
"While the stock market is where many investors take risks to haul in lots of money, the bond market tends to attract people who want to preserve their wealth. Bondholders get their money back along with periodic interest payments (the yield) - or at least they're supposed to. "
"While they generally don't reap double-digit gains as some stockholders do, bondholders can expect a steady stream of income from the interest payments as well as a lump sum of money when their bonds mature. "
See the entire article at:
Mechanics, educators, engineers of modest means. These are among the roughly 100,000 people who own General Motors Corp. bonds. Some bought the bonds before they were downgraded to junk status yet decided to hang on to them. Others went in with eyes open, buying at a substantial discount to the bonds' face value, betting the company wouldn't crater and their gamble would eventually pay off.
Speculation was what they did, whether they like the term or not.
This is the continuation of a Series of articles in the Washington Times concerning GM Bondholders. Although I think the articles are for the most part well done, I took exception to the term "Speculator" used in the title. But then, I gave it some thought and "Speculator" wasn't a nasty or derogatory term until Mr. Obama made it one when he referred to Chrysler bondholders as "Speculators". Anything in the future, whether its getting out of bed in the morning, eating a piece of fruit or making an investment involves some degree of "speculation" as to the outcome in the future. We base our judgement on our past experience, laws in place or other known factors in making our decisions. When someone comes in and changes the rules or circumvents the law, I think a better term is "victim" rather than "speculator".
Tuesday, June 16, 2009
Some excerpts from the WSJ article of June 10.....
"A hodgepodge of GM bondholders have asked him to represent them in a challenge to GM’s bankruptcy filing."
"As for Lauria, he’s chagrined by more than just the outcome of the Chrysler/Fiat situation. He says his experiences of the last month “cause me to worry that there is something very wrong with the system,” and he says he wonders “whether our judiciary is today able to fulfill its constitutional mission to ensure that the rule of law prevails — particularly in the face of perceived crisis."
See the article at:
I can't imagine Mr. Lauria not participating in the GM Bankruptcy fight, as this presents a unique opportunity to bring the merits of a strong case against the GM/Task force actions in front of the Supreme Court should the lower courts not redistribute the ownership of the new GM based on existing bankruptcy law. Just a thought.....
Monday, June 15, 2009
"Our position is they can spin the assets off--that's done all the time in bankruptcy cases, there's nothing remarkable about it--but determining who owns it and in what proportions should be done in accordance with the law," he says. "The bankruptcy code has very specific protections and requirements for how you confirm a plan."
It's hiding the reorganization plan under the guise of a bankruptcy sale that angers Richman, who feels his clients are being dictated to by larger parties with a vested equity interest in a new GM free from liabilities.
See the entire article at:
GM Dissident Bondholders Pick Patton Boggs over White & Case
Sunday, June 14, 2009
"Plenty of GM's bondholders are Wall Street types. Most of the company's $27 billion in private debt is held by investment firms. But many of those firms are actually managing the money of individual investors. And fully 20 percent of the bonds are owned personally by roughly 100,000 mom-and-pop investors across the country, according to Main Street Bondholders, a group organized to lobby on their behalf. "
"Paralegals, pilots, small-business owners and lots and lots of retirees have poured their life savings into the bonds of GM, once a blue-chip company so blue that it was considered safe for widows and orphans to own."
GM's deal erased many average Americans' savings
See Who the are, what they lost .....
Friday, June 12, 2009
RESPONSES OR OBJECTIONS, IF ANY, TO THE RELIEF SOUGHT IN THE MOTION SHALL BE FILED with the Clerk of the Bankruptcy Court and served upon:
(a) Weil, Gotshal & Manges LLP, attorneys for the Debtors, 767 Fifth Avenue, New York, New York 10153 (Attn: Harvey R. Miller, Esq., Stephen Karotkin, Esq., and Joseph H. Smolinsky, Esq.); (b) Cadwalader, Wickersham & Taft LLP, attorneys for the Purchaser, One World Financial Center, New York, New York 10281 (Attn: John J. Rapisardi, Esq.); (c) the attorneys for the Creditors Committee; (d) Cleary Gottlieb Steen & Hamilton LLP, the attorneys for the UAW, One Liberty Plaza, New York, New York 10006 (Attn: James L. Bromley, Esq.); (e) Cohen, Weiss and Simon LLP, the attorneys for the UAW, 330 W. 42nd Street, New York, New York 10036 (Attn: Babette Ceccotti, Esq.); (f) Vedder Price, P.C., attorneys for Export Development Canada, 1633 Broadway, 47th Floor, New York, New York 10019 (Attn: Michael J. Edelman, Esq. and Michael L. Schein, Esq.); (g) the Office of the United States Trustee for the Southern District of New York (Attn: Diana G. Adams, Esq.), 33 Whitehall Street, 21st Floor, New York, New York 10004; and (h) the U.S. Attorney’s Office, S.D.N.Y., 86 Chambers Street, Third Floor, New York, New York 10007 (Attn: David S. Jones, Esq. and Matthew L. Schwartz, Esq.), SO AS TO BE RECEIVED NO LATER THAN JUNE 19, 2009, AT 5:00 P.M. (EASTERN TIME) (the “Objection Deadline”).
See the link for full document:
So next week we should be a huge fully of objections to the sale being filed from various parties.
The price, the result of a second round of an auction by 13 dealers including Deutsche Bank AG and Morgan Stanley, means sellers of the swaps will pay 87.5 cents on the dollar to buyers of the protection, according to data from administrators Markit Group Ltd. and broker Creditex Group Inc.
Soros: Ban CDS as 'Instruments of Destruction'
But the potential damage that CDS could do was not limited to financial firms, Soros added. He pointed to the bankruptcy of North America's largest newsprint maker, AbitibiBowater Inc and the bankruptcy of General Motors.
"In both cases, some bondholders owned CDS and they stood to gain more by bankruptcy than by reorganisation." See the entire article at:
Thursday, June 11, 2009
The settlement will be the largest for the market since last year’s collapse of Lehman Brothers Holdings Inc.
Banks, hedge funds, insurance companies and other investors had bought or sold a net $2.31 billion of default protection on the automaker’s debt as of May 27, according to data from the Depository Trust & Clearing Corp., which runs a central registry that captures most trades. Another $776 million was bought through contracts on indexes that include GM, the largest U.S. automaker, among groups of companies, New York-based Depository Trust’s data show.
Wow, imagine that....banks, hedge funds and insurance companies buy default protection which pays them full value of their bonds IF AND ONLY IF THERE IS A DEFAULT ON THE BONDS WHICH OCCURS WITH A BANKRUPTCY FILING! IF my math is correct..$2,310,000,000 + $776,000,000 = $3,086,000,000. OK have to use a calculator for this one......$3,086,000,000 (total CDS)/27,200,000,0000 (total bonds)=11.3%. Hummmm.....The original tender offer for the bonds had a mandatory 90% tender rate. Well with 11.3% getting paid in full how could they have ever gotten 90%, even if the terms were fair?
Stay tuned lets see what value the market makers place on GM bonds at the CDS Auction June 12.
"While such an 'agreement' has been touted as a template for all bondholders -- including holders of billions of dollars' worth who have not yet been heard from -- and is now embedded in the transfer of assets scheme ... there are significant questions well beyond whether it is really supported even by a majority" of the bondholders, the group said in its request to become an official committee. See the entire article at:
The Wall Street Journal reports, "A hodgepodge of General Motors Corp. bondholders have asked him to represent them in a challenge to GM's bankruptcy filing." according to the Journal, Lauria "hasn't formally accepted the job, but before the ruling Tuesday, he said from his home base in Miami, ‘I must admit, I am enjoying the heck out of this.'"
I think we will see a firestorm of objections filed opposing the government mandated fleecing of GM Bondholders prior to the June 19, 2009 filing deadline.
Glenn Kurtz and Thomas Lauria of White & Case
"According to Kurtz, what was going on was an unprecedented suspension of bankruptcy rules. And those same issues will likely be raised in the GM bankruptcy, where Kurtz and Lauria will likely have a role. "I think we can be assured that GM will rely heavily on the blueprint that was used in the Chrysler case," he said. "One of the e-mails that was produced in the Chrysler litigation specifically noted that Treasury was viewing Chrysler as a guinea pig...for GM."
See the article in US News at:
Wednesday, June 10, 2009
Judge Robert E. Gerber of the U.S. Bankruptcy Court for the Southern District of New York on Tuesday denied a bid by an unofficial committee of three bondholders.
See article: http://www.law360.com/registrations/user_registration?article_id=105660&concurrency_check=false
See Document with handwritten denial at top.
Endorsed Order signed on 6/9/2009 re: Expedited Hearing on the Motion for an Order Directing the United States Trustee to Appoint an Official Committee of Family & Dissident GM Bondholders. Requesting an Order for Shortening Time Denied. (Hearing on Motion Directing the United States Trustee to Appoint an Official Committee of Family & Dissident GM Bondholders is Scheduled for 6/23/2009 at 2:00 PM) (related document(s) 552) (Blum, Helene) (Entered: 06/10/2009)
"The problem is that General Motors is a whole different case altogether. And I am not so sure the government is going to be successful here. Here’s why. While the Chrysler deal involved a sale of the principal assets, the GM bankruptcy looks more like a stealth re-organization which violates the spirit of section 363. Back in 2004, Daniel Glosband, a bankruptcy expert at the law firm Goodwin Proctor reflected on this issue at the site FindLaw." See the entire article at:
See the entire article at:
Tuesday, June 9, 2009
For more information go to http://www.mainstreetbondholders.com/
The U.S. Supreme Court on Monday held up Chrysler's sale to Fiat SpA (FIATY) - a move the U.S. government has warned could lead to liquidation - at the request of several Indiana pension funds and consumer groups that opposed the transaction.
Monday, June 8, 2009
See the entire article at: http://www.dailypaul.com/node/95684
Sunday, June 7, 2009
See the entire article by clicking below:
Big Wheels Keep on Rolling…Over Bondholders
By ANDREW BARY
The United Auto Workers have scored another victory under the extremely favorable terms offered on government loans to a bankrupt GM. Meanwhile, bondholders and taxpayers are left holding the bag.
THE POLITICALLY POWERFUL united Auto Workers emerged with an exceptionally sweet deal in the proposed reorganization of a bankrupt General Motors -- and the taxpayer essentially is footing the bill.
Uncle Sam's GM Follies")
The federal government may be lucky to get back half of the $50 billion owed by GM (ticker: GMGMQ), consisting of nearly $20 billion of existing loans and about $30 billion that Uncle Sam plans to extend through so-called debtor-in-possession financing in bankruptcy. ("
The government effectively is making a gift to the UAW, because it is converting about $40 billion of its GM loans that are senior to the UAW claims into a 61% equity stake in the new company, making its recovery highly dependent on the new GM's equity value.
Ford (F) and BMW (BMW.Germany), arguably stronger companies, each have market values of $20 billion.
With Wall Street anticipating a $24 billion market value for the retooled GM, the government loans would be valued at about 50 cents on the dollar, after factoring in the $8.8 billion of new GM debt and preferred that Uncle Sam will get. For the government to come out whole, GM's equity value would have to approach $70 billion -- a very unlikely outcome.
The Obama administration's willingness to move from a position as a secured lender to an equity holder in GM will let GM reduce its total debt to $17 billion from more than $50 billion. While financial details are sketchy, GM could emerge from bankruptcy with a strong balance sheet, $20 billion of cash and no net debt, according to a report by JPMorgan auto analyst Himanshu Patel.
As it did in the Chrysler bankruptcy last month, the UAW pulled off a coup, because it probably will emerge with 60 cents to 70 cents on the dollar for its $20 billion claim for post-retirement health care for its members. It will get $9 billion of new debt and preferred stock, plus a 17.5% equity stake.
Another group that does well: banks owed about $6 billion by GM. They are expected to be paid in full from the government's fresh loan of $30 billion to a bankrupt GM. In contrast, Chrysler's bank lenders probably will get just 29 cents on the dollar in a deal orchestrated by the administration.
The biggest losers: the bondholders who own $27 billion of unsecured debt, including many individuals. They are to receive a 10% stake in the new GM, plus warrants to buy an additional 15%.
Daimler (DAI), BMW, Honda (HMC) and Toyota (TM).
The new deal, while less punitive than GM's original offer in April, may result in a recovery of little more than 15 cents on the dollar for the bondholders, according to analysis by CreditSights. This suggests little upside potential to the General Motors debt, which was trading at about 12 cents on the dollar last week. Assuming GM has an equity value of $24 billion, bondholders would get $2.4 billion in equity, plus warrants for 15% of GM, worth at least $700 million.
Investors enamored of the auto industry probably would do better with common stock or debt of Ford or shares of strong foreign car makers like
The exchange-traded GM debt, including convertibles (formerly tickers GBM and GPM) with a $25 face value, were suspended from trading on the New York Stock Exchange, and will be delisted, along with GM's shares. These convertibles, and other former NYSE-listed debt, likely will soon start trading over-the-counter.
It is galling to many bondholders that they are getting so little, relative to the UAW, for a similar legal claim, but the Obama administration played favorites, just as it did with Chrysler, and the unions got preference. No matter that much of the proceeds from the $27 billion of debt sold by General Motors went directly into the UAW employee-benefit plans.
In helping to shape General Motors' bankruptcy, the president seems to have played favorites.
"The UAW gets a recovery of five times the bondholders' under reasonably upbeat scenarios." wrote analysts at CreditSights last week. "This is just the fact. Let's see if anyone in Washington or too many media outlets will make the simple statement. The willingness of the Treasury to face the likelihood of eating a major loss down the line to get this deal done in what is still a very UAW-friendly and lopsided deal only partly eases the pain for bondholders."
No wonder the UAW could boast: "For our active members, these tentative changes mean no loss in your hourly base, no reduction in your health care and no reduction in pensions." This is an impressive accomplishment for an organization that faced disaster in a less favorable bankruptcy scenario.
In fact, never has an American union done so well at the expense of shareholders and creditors.
Friday, June 5, 2009
In the Chrysler case, the dissident debt holders disbanded 10 days after the company collapsed, citing political pressure that began when President Barack Obama criticized the group. Evan Flaschen, chairman of the restructuring department at law firm Bracewell & Giuliani LLP, said uncooperative GM bondholders may be less politically vulnerable.
"The story that hasn't been told is, this isn't GM's union retirees versus the bondholders. It's retirees versus other retirees," said Flaschen, who isn't involved in the GM matter. While Chrysler's dissidents lost steam because they were forced to identify themselves and faced public stigma, including alleged death threats, GM's opponents may be harder to criticize, Flaschen said.
GM Chief Executive Officer Fritz Henderson has said the U.S. Treasury allowed the automaker very little flexibility in its negotiations with bondholders. Julie Gibson, a spokeswoman for GM, declined to comment. "We're stuck, we need the white knight," said Gary Thomas, a retired auto mechanic and GM bondholder. "I'm not asking for special treatment, I'm just asking for parity. I just feel like whatever the UAW gets, the bondholders should get."
"Initially, the company said getting bondholders to agree to a debt swap was its best chance for avoiding Chapter 11. But the latest plan is designed to expedite a bankruptcy filling more than to avoid it. As part of the agreement, bondholders pledged not to oppose GM's reorganization in court.
Although the committee supported the deal, a group of dissident bondholders represented by Thomas Lauria, a lawyer for holdouts in the Chrysler case, fought against it. They argued small, individual bondholders were left with no voice as the U.S. Treasury negotiated directly with GM's large institutional bondholders.
Thursday, June 4, 2009