Main Street Bondholders today dismissed GM’s new debt-for-equity exchange proposal citing the gross unfairness in giving unions an estimated five times more dollar value per claim than the small bondholders.
For example, on an assumed $25 billion valuation of the new entity, unions would reap 66 percent of their original claim while small bondholders will receive only 13 percent of their claim.
A spokesman for the bondholder’s coalition said, “In this new deal, the U.S. government appears to overtly favor the UAW members over America’s seniors and retirees. The Main Street Bondholders intend to seek separate official committee status as allowed in section 1102 of the bankruptcy code. We have a large and growing concern of small bondholders, especially seniors and Baby Boomers who will receive next to nothing under this deal, and we want to ensure that the bankruptcy process is fair to everyone. Thus we are seeking counsel for a separate class of small bondholders.”
“From the beginning there’s been a lack of transparency in this entire restructuring process. No one seems to have the best interests of small bondholders at heart,” concluded Jim Martin, President of the 60 Plus Association, organizers of the bondholders coalition.
“Let’s finally start an honest negotiation in good faith, because this has been a campaign of deceit from the beginning, starting with the blatantly unfair offer,” Mark Modica, Business Manager at a Saturn Car Facility from Chalfonte, Pennsylvania, said. “It’s time to look out for the interests of the small bondholders, GM, and America. There’s no conceivable reason for every group at the table to get a better deal than the small bondholders. This deal is being financed on the back of public bondholders.”
“Mr. President, we appreciate your attempts to fix our economy, but please don’t break us in the process,” said Catherine Graves, a Retiree from Celebration, Florida. “The initial proposal had all of us looking into the abyss of despair, any improvement should represent some degree of relief. As an enthusiastic supporter of President Obama, I was hopeful that he would appoint a task force having respect for his ideology. For this reason, I am extremely disappointed by the apparent continued discrimination being shown to GM bondholders. We are just regular, middle class citizens who have tried to live by American values, doing things right – working hard and saving for retirement. What a sorry state of affairs this is for our new President who inspires hope in so many, and who, himself, represents the rewards that can be achieved by living by American values.”
This announcement follows the Main Street Bondholders’ legislative meetings on Capitol Hill last week voicing concerns over their exclusion in the GM bankruptcy negotiations and to push for a meeting with the Auto Task Force. For the past several weeks leading up to the bankruptcy decision, the Main Street Bondholders coalition held press events with small bondholders in Warren, MI, Philadelphia, PA, Tampa, FL, and Washington, D.C., to discuss the nationwide impact of the bankruptcy issue and to advocate for a fair and equitable solution for all parties.
Main Street Bondholders is a project of the 60 Plus Association. For more information, visit: www.MainStreetBondholders.com