Academic

FROM CHRYSLER TO G.M.: GM and its bondholders are at odds over $27 billion in claims ahead of a J?

By Glenn Reynolds

FROM CHRYSLER TO G.M.:

GM and its bondholders are at odds over $27 billion in claims ahead of a June 1 deadline. The bond group called GM?s April 27 offer to swap their claims for a 10 percent equity stake ?neither reasonable nor adequate? and asked to be treated more equitably with labor unions. The counter-proposal by bondholders hasn?t been adopted.

GM?s offer is ?grossly unfair to the point of abusive,? Glenn Reynolds, chief executive officer of CreditSights Inc. in New York, wrote in a report this week. ?Politics remains an overriding factor in the equation and has been decidedly unfriendly to the interest of bondholders in a contest with the disproportionately outsized power of organized labor and other Washington-heavy constituencies and interest groups.?

CreditSights recommends bondholders reject GM?s debt exchange and expects the offer to fail.

No, he’s no relation, but I see him quoted now and then. Seems on-target here, anyway. . . .

Full post as published by Instapundit.com on May 07, 2009 (boomark / email).