A bankruptcy judge approved the sale of nearly all of GM's assests to a new company which will be run under the name General Motors Company. The "new" GM will have operate with new UAW agreements and far less debt than before. Here's the breakdown of the new GM's ownership structure:
The new GM's common stock will be owned by:
1. U.S. Department of the Treasury: 60.8 percent
2. UAW Retiree Medical Benefits Trust: 17.5 percent
3 Canada and Ontario governments: 11.7 percent
4 The old GM: 10 percent
With over 60% ownership, there's no doubt that the federal government is now fully in charge -- for better or worse. Good luck. .
AutoObserver: Judge Approves GM Asset Sale, Paving Way To Merge From Bankruptcy.
dougtheeng says:
07:44 AM, 07/ 6/09
Makes me sad to live in Ontario.
powell_jr says:
09:35 AM, 07/ 6/09
So that means I own 0.0000001 percent of GM...Sweet.
moparbad says:
10:27 AM, 07/ 6/09
Your calculation is incorrect powell.
powell_jr says:
10:32 AM, 07/ 6/09
my bad, 0.000001.
DCuerpoJr says:
10:56 AM, 07/ 6/09
So does that mean that current stock holders get the shaft?
brn says:
10:59 AM, 07/ 6/09
DCuerpo has a valid question. What happens to those that believed in GM and intentionally provided financial support?
heffling says:
11:08 AM, 07/ 6/09
I think you mean debt and not debut.
I read on cnn.com that the Bankruptcy Judge decided in favor of the reorganization on the basis that under a bankruptcy liquidation, the shareholders wouldn't get anything as all the proceeds from the sales would go to paying off the debtholders. Under the reorganization, at least the bond holders would still get something.
Personally, I smell a huge rat. There is no way that the government should be getting a 60% share in GM, as both the shareholders and bondholders have had a much greater amount invested in GM than the US government.
Not only that, but this has been pushed by the Executive branch, which shouldn't be forcing the Judicial brance in such a way.
I really hope this gets appealed, as it is a massive breakdown in the Rule of Law.
flicmod says:
04:40 AM, 07/ 7/09
The creation(and the subsequent transfer of all their "good" assets)of the New GM was the only legal way the government could obtain the company without merely cutting the shareholders out of the now "Old GM". The existing shareholders have all been given the shaft by basically inheriting ONLY the problems of GM which are now consolidated into "Old GM".
It's highway robbery. The government once again strong-arms their way into the ownership of a company that the investors (which have more legal clout than anyone) didn't want. The same thing happened to Chrysler. The only difference is the owner.
This is not how bankruptcy is supposed to go. Liquidation is guaranteed in bankruptcy and that's not what is happening. They're merely using smoke and mirrors to partially cover up the fact that the federal government is now in control.
estreka says:
04:08 PM, 07/ 7/09
This is so silly. There's no way a 60% owner will only have 1 member in the Board. If that is the case, that one person might as well hold the meetings by him/herself.
hybris says:
08:30 PM, 07/ 8/09
Doomed we are that is all that can or really needs to be said.