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