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Old 02-09-2009, 03:42 PM   #1
Supermans
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GM and Chrysler (Bankruptcy Talks/Rumors))

Bloomberg reported that General Motors (GM) and Chrysler LLC may have to be forced into bankruptcy by the U.S. government in order to assure repayment of $17.4B in federal bailout loans.

http://stage.theflyonthewall.com/entry.php?symbol=GM

http://blogs.barrons.com/stockstowat...d=yahoobarrons

Gov’t Explores Move To Push GM Into Bankruptcy
Posted by Bob O'Brien

EFFORT AIMS TO MOVE TAXPAYERS TO TOP OF CREDITOR LINE

General Motors (GM) isn’t necessarily out of the woods in terms of a bankruptcy risk, though a move to push the ailing automaker into Chapter 11 protection wouldn’t likely alter the company’s recovery, or result in a dramatic change in operations.

Media reports said the federal government, which has lent the auto maker and rival Chrysler a combined $17.4 billion in relief, wanted to move to the head of the line of creditors that would be reimbursed for loan payments. As it stands, the government’s claims have been subordinated behind other creditors, including bankers JPMorgan (JPM) and Goldman Sachs (GS) - a pecking order the feds find inhospitable, given the political exposure viewed in bailing out private enterprise.

By pushing the auto maker into bankruptcy, the government hopes to alter the payment plan in a manner that would make its repayment plans superior to that of private-enterprise lenders, and give taxpayers the first bite of the recovery apple. The deal would allow the government to offer GM a debtor-in-possession loan, thus elevating its claims on GM income. In short, the government would be buying its way to the top of the line.

Meanwhile, GM has been considering a plan to buy back some of the plants of Delphia Automotive, the parts supplier that has been operating under bankruptcy protection for three years.
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Old 02-09-2009, 03:43 PM   #2
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Damn. Hard times.
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Old 02-09-2009, 04:05 PM   #3
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Love the way they are masking the Fed Gov. with the word 'Taxpayer'. The way I read this, they are going to circumvent the paying of the private business to get the Gov. money first. Which may be playing semantics but it is a bad trend that is getting worse. How does getting Gov. money ahead of private ent. money create jobs or help the echo-crisis at all.
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Old 02-09-2009, 05:50 PM   #4
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Part of the deal here was that government money loaned to the car companies would be repaid before any other debtors, which made the whole thing a ridiculous model of how to make certain a company on the edge of bankruptcy actually goes bankrupt since debtors were put into a position where they know they wont get any money until a virtually broke company somehow manages to repay the government a few billion first. Can you say instant transformation to absolutely no credit rating?
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Old 02-09-2009, 05:55 PM   #5
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They just need to file and get it over with and move on. I just dont see any way around it.
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Old 02-09-2009, 06:08 PM   #6
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Looks like the presidential donk may be short on parts soon..

I lol'd.
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Old 02-09-2009, 07:40 PM   #7
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Quote:
Originally Posted by syr74 View Post
Part of the deal here was that government money loaned to the car companies would be repaid before any other debtors, which made the whole thing a ridiculous model of how to make certain a company on the edge of bankruptcy actually goes bankrupt since debtors were put into a position where they know they wont get any money until a virtually broke company somehow manages to repay the government a few billion first. Can you say instant transformation to absolutely no credit rating?
That's how they force them into Chapter 11 I geuss.

The Fed wants everyone to be dependant on them. It's the new way.
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Old 02-10-2009, 01:07 PM   #8
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GM says it has plans and PROOF in place to show that it can pay back the gov't loans IN FULL by 2011. Which is a million times better than how the banks are handling their money...will we ever get those wasted dollars back?

This is all rumor for now...I sincerely hope it doesn't get much further than that.
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