GM Bankruptcy Sale Appeals are filed

Judge Gerber placed a four day stay on the GM Asset Sale order until Thursday to provide objectors time for an appeal. There was some wisdom in this decision since there were hundreds of objectors. It was a given that appeals would be filed immediately. The initial appeal was filed first thing Monday morning by "Individual Accident Litigants".

See the entire document:

http://gmcourtdocs.gardencitygroup.com/pdflib/2970_50026.pdf

I'll try to update as the appeals begin to be filed.

GM asset sale approved late Sunday

"Barring a successful last-ditch appeal by creditors to block the sale, the U.S. Treasury Department -- through its Vehicle Acquisition Holdings LLC -- would be able to close on the deal after noon on Thursday. GM and the Treasury Department had asked Gerber to make his ruling effective immediately, allowing the sale of GM's assets to close as early as today, but under Gerber's order, GM and the Treasury Department aren't authorized to close the deal until after noon on Thursday, giving objectors a chance to file an appeal and win a court stay. But Gerber warned objectors that the government might not wait that long. "

"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:
http://www.detroitnews.com/article/20090706/AUTO01/907060362/GM-asset-sale-approved-late-Sunday

GM 363 Sale Approved 7/5/09

Sadly, the sale for GM best assets to a new Government controlled entity was approved as a means of circumventing the Chapter 11 bankruptcy and negotiating with the creditors.

See the Court decision here:

http://gmcourtdocs.gardencitygroup.com/pdflib/2968_50026.pdf

See Wall Street Journal article:

http://online.wsj.com/article/SB124685350559099233.html

I assume the appeals by various parties will be filed within the next few days.

GM Recovery Plan Rests With Judge

"We support the creation of a new GM. We think it's a fine idea," Michael Richman, a lawyer for the group, said, acknowledging that without government loans, GM would collapse. "That doesn't earn the government an exemption from the law."

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:
http://online.wsj.com/article/SB124654496390486149.html

GM's bondholders: Let's 'negotiate fairly'

The representatives explained to the court that they shouldn't be left behind in GM's bankruptcy process, arguing that such a move is not legal.

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.

http://money.cnn.com/2009/07/02/news/companies/GM_bankruptcy/index.htm?postversion=2009070211

Dissenting bondholders argue against GM asset sale

"Calling GM's sale the first attempt at a "Chapter 11 nationalization," Michael Richman, a Patton Boggs bankruptcy attorney representing the group of dissenting GM bondholders, said the U.S. government had been "overbearing" in its rescue of the automaker and was circumventing the law."

See the entire story here:
http://money.cnn.com/news/newsfeeds/articles/reuters/MTFH98548_2009-07-02_15-14-44_N0245292.htm

U.S. government won't fund GM after July 10, official says

"We have no intention to further fund this company if the sale order is not entered by July 10," Harry Wilson, one of the Treasury Department officials overseeing GM's restructuring, said while being cross-examined by an attorney for a group of GM bondholders opposing the sale. It was the second consecutive day of hearings to determine GM's fate.

http://www.cbc.ca/money/story/2009/07/01/money-general-motors-sale-bankruptcy-hearing.html

GM bankruptcy wrangling in 2nd day

Mark Salzberg, an attorney with Washington-based Patton Boggs, representing unsecured bondholders of GM, asked Wilson a series of questions about the reasoning behind leaving bondholders out of the bankruptcy process.

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."

(The truth comes out that the auto task force wanted to deprive the bondholders their rights under the Chapter 11 bankruptcy)

See the entire article at:

http://money.cnn.com/2009/07/01/news/companies/GM_bankruptcy/index.htm?postversion=2009070113

The GM Bankruptcy and the Supreme Court

Great Article written by an attorney and a GM Bondholder.....

"The court might suggest that the Obama Administration return to Congress and ask for expedited hearings on legislation that allows the federal government to make loans to GM. Armed with a court order and a bully pulpit, President Obama should have some quick success. The loans would be conditioned on GM's filing for normal Chapter 11 bankruptcy plan process with an accelerated calendar and with the procedural protections unavailable under the section 363 fast track bankruptcy provisions used in the GM and Chrysler cases. The new loan assistance to GM would be tied to a requirement that the UAW adjust its benefits and wages to be more in line with that of GM's historically profitable counterparts. All of the federal government's senior claims would be paid before the bondholders, UAW, and other junior creditors would be eligible to collect significant recoveries on their claims."

See the entire article at:
http://www.americanthinker.com/2009/06/the_gm_bankruptcy_and_the_supr.html

June 30 Hearing- List of Objectors is 108 pages

Incredible! Look at the list of objectors that are have filed complaints against the GM/Government Sale of assets and screwing of Bondholders. The list is 108 pages long!

http://gmcourtdocs.gardencitygroup.com/pdflib/2756_50026.pdf

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.

Michael Richman of Patton Boggs Audio, June 26

Excellent Audio of Michael Richman of Patton and Boggs who is the legal representation of the "Family and Dissident GM Bondholders" gives a good summary of the Bondholder Issues and an update on what is happening. It's a must hear audio.

Section 1-Click to hear

http://gtv.shadowtv.net/w/playback.action?format=audio/mpeg&guid=A3ED18BB-BA1C-7101-66A7-3836BDACAC6A&ownerguid=1A132ACA-C2CE-960E-7E32-4DD67F07E7CA

Section 2-Click to hear

http://gtv.shadowtv.net/w/playback.action?format=audio/mpeg&guid=DFA394ED-1A6A-7EBC-CC2C-1DD014AFEDA5&ownerguid=1A132ACA-C2CE-960E-7E32-4DD67F07E7CA

Section 2 talks about what to expect. Very good discussion about how the GM plan is legally unsupportable.

F and D Committee to Depose GM CEO Henderson

On Friday June 26, the F&D committee filed their witness list for depositions, including GM CEO Frederick Henderson. See the original document here:

http://gmcourtdocs.gardencitygroup.com/pdflib/2628_50026.pdf

Also on the list is member of the Task force. Finally there will have to answer the tough questions from the F&D Committee attorney's at Patton and Boggs.

Defiant small GM bondholders vow to carry on the fight

Defiant small GM bondholders vow to carry on the fight
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.

An unofficial committee of family and dissident bondholders lost a bid this week to gain official status as a separate committee, which would have meant the estate paid the legal fees. The group intends to contest the sale separately.

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.

A survey by the unofficial committee of family and dissident bondholders of its group showed 86 per cent of respondents bought their bonds between 80 and 100 cents on the dollar. Many are retirees who stand to lose much of their savings.

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."

http://www.ft.com/cms/s/0/48980682-6326-11de-b803-00144feabdc0.html

GM Update: Dissident Bondholders Not Backing Down

June 25, 2009 6:05 PM
GM Update: Dissident Bondholders Not Backing Down

"The bondholders complain that the plan to sell most of GM's assets out of bankruptcy in a Section 363 sale will benefit some unsecured creditors and hurt others, according to court records. The retiree trust for the United Auto Workers, for instance, will gain a large minority stake in the new GM, while the individual bondholders may have to settle for pennies on the dollar, attorneys have said."

"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."

See the entire article at:

http://amlawdaily.typepad.com/amlawdaily/2009/06/gm-update-dissident-bondholders-not-backing-down.html

Judge denies GM bondholder group committee request

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.

www.reuters.com/article/governmentFilingsNews/idUSN238817420090623

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.

http://amlawdaily.typepad.com/amlawdaily/2009/06/judge-rejects.html

Late Objection Filing Notification

If you are an individual GM bondholder, sometimes people mistakenly think some issues are "preferred stock", but they are debt instruments or "baby bonds" as indicated on the GM investor website. You most likely received your notification of the bankruptcy filing and proposed sale of the good assets via a mailed notification. I have bonds in four brokerage accounts and ALL four notifications came to me on June 19, 2:00 PM PST. The objection deadline as indicated on the filing, after which NO OBJECTIONS WILL BE CONSIDERED, was June 19, 5:00 PM EST. They must be on file with the bankruptcy court by this deadline. Obviously, it was impossible to file an objection in a timely manner. GM has at every turn trying to circumvent the legal rights of individual creditors, this is no exception. I have been in contact with others who also received their filing notifications too late to meet the deadline.

What can you do--write to:

The Honorable Robert E. Gerber

United States Bankruptcy CourtSouthern District of New York

One Bowling GreenNew York, NY 10004-1408
Case No. 09-50026 (REG)

Phone: 212-668-2870
Fax: 212-668-3357

I just spoke with the bankruptcy court, you can still send your objections; include a cover letter indicating your notification was late.

GM Restructuring Meets Opposition

"A group of General Motors Corp. bondholders moved to block the auto maker's bankruptcy restructuring on Friday, saying the plan discriminates against them in favor of other creditors.The group, which aims to represent small individual GM bondholders, said the auto maker's proposed overhaul, orchestrated by the U.S. government, gives a disproportionate recovery to the United Auto Workers union at their expense." See the WSJ article at:

http://online.wsj.com/article/SB124544333400432269.html

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:

http://www.google.com/hostednews/ap/article/ALeqM5jDHyGHqjGfzLJa_eRhwViUGCwazgD98U128G0

Small Bondholder Attorneys file objections June 19

OK, some of you folks were getting nervous that the big guns were not ready to fire. I had assumed ("speculated" J) that the major objections would be today, as the deadline is June 19, 2009 at 5:00 PM. The filing is on behalf of the "Unofficial Committee of Family and Dissident GM Bondholders". Very interesting read...here is the original filing from just moments ago.....

http://gmcourtdocs.gardencitygroup.com/pdflib/1969_50026.pdf

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.

http://gmcourtdocs.gardencitygroup.com/pdflib/1970_50026.pdf

Mom and Pop trip up GM restruturing

The Chapter 11 proceedings of General Motors Corp. has hit a speed bump with bondholders -- but not from the hedge funds or pension funds that hold millions of dollars in its bonds. Instead the bankrupt carmaker faces off against a Connecticut accounting professor and his wife who hold $400,000 of GM's bonds...

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:
http://www.thedeal.com/dealscape/2009/06/gm_bondholders_dissidents_bank.php

GM Attorney Wastes No Time in Fighting F andD Committee

The attorneys for GM wasted no time in filing their objections to recognizing the "Unofficial Family and Dissident GM Bondholders" as a official creditors committee. The hearing is scheduled for June 23 at 9:45 AM.

http://gmcourtdocs.gardencitygroup.com/pdflib/1805_50026.pdf

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".

US District Bankrucptcy Judge repeals reorganization plan

This very important article just came out. It's the second article on the link below. The Bankruptcy plan for New Century Financial, at one time the second largest sub prime lender in the U.S., was set aside on appeal. There were two faults but the second was, which has a bearing on the GM Bankruptcy is highlighted below. U.S. District Judge Sue L. Robinson indicated:

"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.

http://www.bloomberg.com/apps/news?pid=conewsstory&tkr=MSFT:US&sid=a57754lDZwro

GM Has Its Dissident Bondholders, Too

"A group of smaller General Motors bondholders is trying to make itself heard in GM’s bankruptcy case, arguing that the big, institutional bondholders that dominate an official committee of bondholders aren’t representing the interests of small investors."

"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.

http://industry.bnet.com/auto/10001726/gm-has-its-dissident-bondholders-too/

"Informal Noteholder Group"

I am wondering (OK, "speculating") what is going through the minds of the "institutional" bondholders or note holders as they sometimes refer to themselves. If I was in the position to lose say $500 million I'd be a bit more upset that I am now. Well its seems, that a group of institutional bondholders formed an "Informal Noteholder Group", as a break away from the Ad Hoc Committee which did the negotiations with GM prior to the Bankruptcy. If you have been following the saga you remember the Ad Hoc Committee, representing 20% of the 27.2 billion unsecured creditors. They resoundly rejected the first offer where only 15% of the bondholders approved, then reportedly approved a sweetened deal where a report 55% of the bondholders approved. Well, maybe, those details aren't quite correct .... OK I'm Speculating. A group of five (four initially, then a fifth jumped in) institutional bondholders formed the "Informal Note holder Group" with legal representation by the law firm Paul Weiss.

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.

General Motors' bankruptcy hammers individuals

Major financial institutions weren't the only ones to loan money to General Motors Corp. before the federal government stepped in. Mom and pop investors bought about 20 percent of the bonds sold by the automaker before it filed for bankruptcy.

"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:
http://www.pittsburghlive.com/x/pittsburghtrib/business/s_629973.html

GM retirees tried to play it safe

The Washington Times GM Bondholders Series, June 18 The Bondholders -- Part 4

"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:
http://washingtontimes.com/news/2009/jun/18/retirees-tried-to-play-it-safe/

Speculation costs GM investors hefty price

Call them the unlikely speculators.

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.

http://www.washingtontimes.com/news/2009/jun/17/gm-investors-pay-hefty-price-for-speculation/

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".

Where is Tom Lauria of White and Case in GM fight?

From an article published June 10, 2009 following the denial of the Supreme Court to hear the merits of the Chrysler-Fiat sale. Tom Lauria was the spearhead for the dissident bondholders of Chrysler and was thought to play a major role in the dissident bondholders in the GM Bankruptcy. With 45% of the $27.2 billion rejecting the GM/Government bankruptcy package Mr. Lauria will have a large pool of dissent clients from which to choose to represent. So why haven't we heard from Mr. Lauria as of yet concerning the GM Bankruptcy case? My off the wall guess is he is shopping for the best dissident bondholder client(s), whether institutional or non-institutional, with the most compelling merits of their case. I think we will know by 5 PM Friday, June 19th when the objections to the 363 Sale of the GM assets are due to be filed with the Bankruptcy court. Let's wait and see.....

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:
http://blogs.wsj.com/law/2009/06/10/the-lawyer-of-the-hour-white-cases-overly-tenacious-tom-lauria/

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.....

GM workers trusted investment in product

"GM's fallen fortunes, therefore, were doubly painful to the company's employees who doubled as bondholders." See the profiles of GM retirees who are also GM Bondholders at:

http://washingtontimes.com/news/2009/jun/16/gm-workers-trusted-investment-in-product/

Patton Boggs Lawyer Takes Turn For Dissident GM Bondholders

While GM's institutional bondholders are supporting the asset sale, Richman worries that many of the automaker's individuals bondholders are getting left in the lurch.

"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:

http://amlawdaily.typepad.com/amlawdaily/2009/06/patton-boggs-michael-richman-gm.html


GM Dissident Bondholders Pick Patton Boggs over White & Case
See Also:

http://www.law.com/jsp/tal/digestTAL.jsp?id=1202431485864&GM_Dissident_Bondholders_Pick_Patton_Boggs_over_White__Case

Washington Times Series GM Bondholders, June 15

An excellent series by the Washington Times on GM Bondholders

"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
http://washingtontimes.com/news/2009/jun/15/gms-deal-erased-many-average-americans-savings/?feat=home_cube_position1

See Who the are, what they lost .....
http://washingtontimes.com/news/2009/jun/15/bondholders/?feat=article_related_stories

GM 363 Sale - Objections Due June 19 5:00 PM EST

Some excerpts:

B. THE SALE HEARING The Sale Hearing will be held before the Honorable Robert E. Gerber, United States Bankruptcy Judge, in Courtroom 621 of the United States Bankruptcy Court for the Southern District of New York, One Bowling Green, New York, New York 10004-1408, on June 30, 2009, at 9:45 a.m. (Eastern Time). The Sale Hearing may be adjourned without notice by an announcement of the adjourned date at the Sale Hearing.

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”).

The failure of any person or entity to file a response or objection on or before the Objection Deadline shall be deemed a consent to the 363 Transaction and the other relief requested in the Motion, and shall bar the assertion, at the Sale Hearing or thereafter, of any objection to the Sale Procedures, the Motion, the 363 Transaction, the approval of the UAW Retiree Settlement Agreement, and the Debtors’ consummation of the 363 Transaction.

See the link for full document:
http://gmcourtdocs.gardencitygroup.com/pdflib/salehearing_1.pdf

So next week we should be a huge fully of objections to the sale being filed from various parties.

June 23 Hearing - F and D Bondholders

June 23, 2009 at 2 p.m. (Eastern Time)
Motion to Appoint Official Committee of Family & Dissident Bondholders

http://gmcourtdocs.com/hearings.php3

GM CDS valued at around $0.125 in 2nd auction

June 12 (Bloomberg) -- Credit-default swaps traders settling contracts that protected against a General Motors Corp. default set a value of 12.5 cents on the dollar for the automaker’s bonds.
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.

http://www.bloomberg.com/apps/news?pid=20601103&sid=aZGopZRF4xcg


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:
http://www.foxbusiness.com/story/markets/industries/finance/update--ban-cds-instruments-destruction---soros/

GM CDS (Credit Default Swap) Auction June 12

Dealers buy and sell bonds of the defaulting companies during the auction in order to set one price by which holders of the derivatives settle. Sellers of the contracts, which are used to hedge against losses or speculate on creditworthiness, pay the buyer face value, less the value of the underlying bonds.

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?

http://www.bloomberg.com/apps/news?pid=newsarchive&sid=auMORpVwbZus

Stay tuned lets see what value the market makers place on GM bonds at the CDS Auction June 12.

Forgotten Voices in GM want to be heard

"But the unofficial group of dissident bondholders, represented by Patton Boggs LLP, said all bondholders should receive a higher recovery under bankruptcy's absolute priority rule and questioned whether the 54% tally of supporting bondholders (based on e-mail and telephone calls) is accurate.

"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:

http://www.thedeal.com/dealscape/2009/06/forgotten_voices_in_gm_want_to.php

Lawyer Who Slowed Chrysler Deal May Take On GM

Tom Lauria who took the Chrysler-Fiat deal to the Supreme Court, may be gearing up for round 2.

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.'"

http://online.wsj.com/article/SB124459032127399999.html

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."

http://www.law.com/jsp/tal/digestTAL.jsp?id=1202431408890&Glenn_Kurtz_and_Thomas_Lauria_of_White__Case

GM Bankruptcy May be Next Up at Supreme Court

GM could face legal objections on several fronts. Bloomberg reports, "GM creditors face a June 19 deadline to oppose a plan to create a streamlined company with trimmed debt and wage costs." New York attorney Michael Richman, who has been retained by a small group of individual GM investors to consider action, told Bloomberg "GM is completely different from Chrysler on the essential facts, and the Supreme Court made no decision other than to reject the appeal in Chrysler, so it has no precedential effect on our situation."

See the article in US News at:
http://usnews.rankingsandreviews.com/cars-trucks/daily-news/090611-GM-Bankruptcy-May-be-Next-Up-at-Supreme-Court-/

Court Won’t Expedite Hearing For GM Bondholders

Law360, New York (June 10, 2009) -- A federal bankruptcy judge has refused to hold an expedited hearing on a motion by individual General Motors Corp. bondholders asking the court to appoint an official committee representing family and other non-institutional bondholders.

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.
http://gmcourtdocs.gardencitygroup.com/pdflib/576_50026.pdf

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)

GM section 363 bankruptcy plan = stealth re-organization plan?

Is the GM section 363 bankruptcy plan really a stealth re-organization plan?

"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:

http://www.creditwritedowns.com/2009/06/is-the-gm-section-363-bankruptcy-plan-really-a-stealth-re-organization-plan.html

Request for official F and D GM Bondholder Committee

Individual General Motors Corp. bondholders, who say their interests are different from institutional holders who support the automaker’s plan to sell its best assets to a new GM, want to be represented by their own official committee in the company’s bankruptcy case. The group, which calls itself the Unofficial Committee of Family and Dissident GM Bondholders, includes three individuals with about $2.3 million in bonds, according to court papers filed today in U.S. Bankruptcy Court in New York.

See the entire article at:
http://www.bloomberg.com/apps/news?pid=newsarchive&sid=a_gv_z6Rs8oo

Read the Request for Official Committee Status 6/9/09

The filings are coming is fast and furious now that legal representation is in place. Read the filing what states the reasons why the "Family and Dissident GM Bondholders" should be granted official committee status to pursue their creditor claims against GM's and the unfair structure of the current GM bankruptcy plan.

http://gmcourtdocs.gardencitygroup.com/pdflib/553_50026.pdf

GM Baby Bondholders get legal representation

Just a few minutes ago Michael Richman of Pratton and Boggs LLC, filed court documents in the GM bankruptcy case to represent the unofficial committee of "Family and Dissident GM Bondholders". This is a group of individual, non-institutional bondholders who own GM retail, or "baby bonds". So far the group consists of 1,500 individuals and growing.....

http://gmcourtdocs.gardencitygroup.com/pdflib/516_50026.pdf

For more information go to http://www.mainstreetbondholders.com/

Chrysler BK Challenge Could Snag GM Restructuring

DETROIT (Dow Jones)--General Motors Corp.'s (GMGMQ) creditors, facing deep concessions in bankruptcy court, could be emboldened to seek better terms if Chrysler LLC's lenders succeed in their challenge.

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.

The opposition, if it succeeds, could bode poorly for GM in the midst of a parallel government-orchestrated Chapter 11 filling it hopes to complete no later than September.

http://online.wsj.com/article/BT-CO-20090609-709133.html

See Also:

http://mobile.baltimoresun.com/inf/infomo;JSESSIONID=8389085C9BEB3EAFC834.2583?view=top_stories_item&feed:a=balt_sun_1min&feed:c=topstories&feed:i=47400095&nopaging=1

and

http://newledger.com/2009/06/chryslers-speed-bump/

Shafting the bondholders -- even China gets it

From the China Economic Net...

"General Motors bondholders have to accept a parsimonious offer to exchange their loans for stock and warrants. But there is no escaping the long-term damage that has been inflicted on credit markets by the Barack Obama administration's attempts to reward the United Auto Workers, one of the US president's strongest supporters in the last election, while trampling decades of legal precedent regarding owners of corporate debt."

See the entire article at:

http://en.ce.cn/Business/Enterprise/200906/03/t20090603_19237103.shtml

The world understand what the Obama administration is typing to do even if those in the US are turning a blind eye to the situation.

Congressman Ron Paul on the GM Bankrutcy

"Political pressure, rather than the rule of law, is deciding how to divide up the remains of GM. The bondholders had billions in retirement savings invested in the company, and though they were entitled to nearly three times as much as the United Auto Workers, the bondholders were left with just a 10 percent stake compared to the union’s 17.5 percent stake. For their 60 percent stake, taxpayers have a future of constant bailouts to look forward to."

See the entire article at: http://www.dailypaul.com/node/95684

Big Wheels Keep on Rolling…Over Bondholders

"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."

See the entire article by clicking below:

http://online.barrons.com/article/SB124425258013590915.html?mod=googlenews_barrons

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.

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. ("Uncle Sam's GM Follies")

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.

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. Ford (F) and BMW (BMW.Germany), arguably stronger companies, each have market values of $20 billion.

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%.

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 Daimler (DAI), BMW, Honda (HMC) and Toyota (TM).

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.

Dissenting GM bondholders

"The difference with GM is that, whereas the 'bad guys' in Chrysler were hedge funds, who Obama called 'speculators,' here they're Main Street -- individual retirees who bought bonds when they were like gold bullion," said Thomas Lauria, a lawyer with White & Case LLP who represents Chrysler lenders fighting that company's U.S. backed reorganization. Lauria said he agreed Friday to also represent GM's dissenting bondholders in any bankruptcy of that company.
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."

Thomas said he has joined a group of individual creditors called GM Bondholders Unite that Lauria agreed Friday to represent. The group is trying to gather investors to get "fair and equitable treatment" in a bankruptcy, according to its Web site. http://gmbondholdersunite.com/

See the entire Article at: http://www.delawareonline.com/article/20090531/BUSINESS/905310329/1003/Some+GM+bondholders+agree+to+equity+deal+to+rescue+company

See also:
"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.

See: http://money.cnn.com/news/newsfeeds/articles/djf500/200905310932DOWJONESDJONLINE000337_FORTUNE5.htm

GM woes wipe out suburban couple

This retired couple stand to lose most of their retirement funds due to the GM Bankruptcy. They may recover a few cents on the dollar, while the lions share of the GM assets meant for GM Bondholder recover is divided up between the UAW, US Government and foreign Government (Canada), with the crumbs (10% + warrants for 15% more at long-short strike prices) given to bondholders. Watch the video.

http://abclocal.go.com/wls/story?section=news/local&id=6848827