And, while the General claims talks are ongoing, that is just for show; less than 10 percent of bondholders accepted its offer.
Given the size of GM, the complexity of its problems, the somewhat dubious nature of the “bad GM” and “good GM” take on “bad bank” ideas (after all, Team Obama refused to do that, so far, with banks), the lack of a buyout partner (unlike Chrysler) and more, I really don’t see a GM bankruptcy as being anything close to a “quick rinse,” because I don’t see it as being anything close to “structured.”
And, I am not alone:
Analysts said GM’s bondholders had tipped the company toward a near-certain bankruptcy that would rank as one of the largest and most complex reorganizations in U.S. history.
“I think the exchange offer was really a transparent attempt to blame bondholders for the bankruptcy rather than to accept responsibility for years of mismanagement and failure to anticipate things that should have been understood,“ said Richard Tilton, a restructuring analyst at Covenant Review.
So, was this deliberate? Perhaps:
“I think the task force made that hurdle so high, they wanted them to go into bankruptcy, they see that as the solution,“ independent auto industry analyst Erich Merkle said on Tuesday.
I predict GM will not come out of bankruptcy, assuming it goes in, before the end of 2010.
And, the “bad GM” idea? Who’s going to pay to liquidate those assets? Uncle Tim Geither’s Honest Used Pontiacs? If Timmy Geithner says “us,” Obama’s going to have huge pressure to dump him.
Besides, has anybody even priced all this? Nooo, the government is simply pledging to take a larger chunk of GM without any guarantee that the industrial policy of Barack Obama is much more than, err... “voodoo economics.“
Meanwhile, there could be plenty of economic winners in a GM bankruptcy.
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