Tuesday, May 26, 2009

 

GM likely to go bankrupt soon

GM bondholders have rejected a proposed bailout that would have them giving up their preferred position in the case of bankruptcy by accepting equity in Government Motors. Smart move. There is a much better chance for them to get something out of a restructured GM than they would have got by a union dominated car company.

This bankruptcy will be tough on the economy at this point. Still, this is likely priced into the market so I doubt this is going to cause too much of a drop tomorrow. But who knows?

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