Not Your Fathers Bail-Out !
Surprisingly a bankruptcy is hailed as a savior. Go figure. It appears that a deal to engage in bankruptcy was needed as everyone involved was taking a cut with the exception of some hedge fund creditors that were holding out for more government bail-out money. By using bankruptcy, the hedge fund creditors are guaranteed nothing as a judge will decide just who will get paid what in debts as it should be the way the law is written.
So for once, the greedy may get nothing and those who had a vested interest and were willing to sacrifice something will live on. Funny, I thought most hedge funds were like junk bonds, how could there be any collateral for the money but I may be wrong about that as Wall Street has had some pretty crafty ways around anything, most especially rules and regulations.
As it appears to be stated, the government will be backing auto warranty and workers pensions and health benefits. This appears to be a good deal but only time will tell.
We have yet to see if this will be the mold cast for GM. The circumstances there may be the same and I do wonder what GM top brass may be personally hiding and holding hedge fund loans to the company at high rates that makes them want to hold out from bankruptcy. In the case you have not ever tried, you can not find out where hedge fund money is invested unless they want you to know and normally not. I doubt on the flip side you will know who the hedge fund investor are unless they want you to.
Now after all, the UAW took concessions before the mess started, are willing to take some more but the company will make no deal from sudden and sure death. One can only think that company officials are holding out to save their own skin (money) as a bankruptcy judge will decide who gets paid and how much. Why else when most everyone is ready to deal would you not.
This action sends a clear message to GM that has more money and jobs at stake they should not find Moot!