It's probably been bankrupt for 20 years, but now officially...
http://online.wsj.com/article/SB124380079212769963.htmlLet me kinda lay out what this means and give my own opinion on things:
If you own GM stock (and if you still do, I have to question your intelligence), it's worth nothing and will probably be halted tomorrow (i.e. sales stopped). Unsecured creditors will get nothing in bankruptcy, unless you are a government-favored class = unions, government.
If you own GM bonds (and there are hundreds of thousands of you out there, mostly individuals), you'll probably get 10 cents on the dollar if your lucky. Basically, GM's debts are so large (and have grown exponentially over the past 15-18 months or so), that bondholders are likely to get really, really bad haircuts in bankruptcy.
You see, the big corporations who own GM bonds (975 bondholders in particular) voted for the plan that gives UAW (unsecured creditors), the government (unsecured creditors) and those big bondholders (secured creditors) common stock shares in the new "company". Since they comprise of over 50% of the bonds total, I suspect the plan will be approved at the bankruptcy level (after some litigation, of course). In short, if you're a secured bondholder, and did not vote for this plan, you're probably screwed. This report was on Bloomberg that I read earlier, then disappeared later. I tend to believe it, given the way these companies usually work.
Just remember, the new government is no different than the last government (except the unions and Acorn get paid off this time, as opposed to the fundies and the oil men last time).
If you're a GM parts supplier, you're going to get nothing on your current obligations because you're an unsecured creditor. If you're a "critical supplier" and can survive the potential loss of income, you can survive. For the rest - hello Chapter 11. Wonder what impact this will have to the job market. Or maybe now there will be an auto parts supplier bailout. (ugh) Too bad Visteon missed it.
If you have any balls, and given a quick perusal of this forum, that ain't many, I would advise to boycott anything GM until it is in 100% private hands. I might even spit on some GM cars for good measure. Although I expected this to come, I am not happy. You shouldn't be either, if you have a brain, and especially if you live in the Midwest. This bankruptcy should have happened many months ago and something would be left. Now, it's just the government.
The future danger here, btw, is that the government will use its leverage to squeeze Ford out (not to mention other foreign car companies), which is partially why I stated the above.