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  • #16
    Originally posted by Shek View Post
    This is flat wrong. Bankruptcy proceedings would have put the company in a similar position as it is today, except those owning a share in the company would be different to a degree.
    What about all the smaller companies GM owed money to. Would they have survived the bankruptcy?
    Removing a single turd from the cesspool doesn't make any difference.

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    • #17
      Originally posted by bonehead View Post
      What about all the smaller companies GM owed money to. Would they have survived the bankruptcy?
      Dunno, did they? GM went bankrupt in June 2009. The government bailout didn't prevent that.

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      • #18
        Originally posted by Shek View Post
        This is flat wrong. Bankruptcy proceedings would have put the company in a similar position as it is today, except those owning a share in the company would be different to a degree.
        Bankruptcy proceedings withoug the bailout would have meant the company assets would have been chopped up to pieces and proceeds given to creditors - end of GM, lots of unemployed people on the streets. The bailout for GM was a wise move in my opinion and its going to pay dividends for the country.

        On the other hand the government has now recovered $11bn from the IPO at a price of $33/share. If the share price reaches $50, the government will recoup all its funds invested in GM.

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        • #19
          Bankruptcy proceedings withoug the bailout would have meant the company assets would have been chopped up to pieces and proceeds given to creditors - end of GM, lots of unemployed people on the streets.
          Why do you assume this?

          On the other hand the government has now recovered $11bn from the IPO at a price of $33/share. If the share price reaches $50, the government will recoup all its funds invested in GM.
          Where are you getting these numbers (other than share price) from?

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          • #20
            Originally posted by Wooglin View Post
            Why do you assume this?
            Because that is what happens when companies go under liquidation and NOT chapter 11.



            Originally posted by Wooglin View Post
            Where are you getting these numbers (other than share price) from?
            How about here for a start...
            .....Through the sale, the government will slash its stake in the company from 61 percent to as little as 33 percent, recouping 11.7 billion dollars for US taxpayers
            .....and here
            ......Washington would need to sell the remainder of its shares at upwards of 50 dollars a piece to recoup taxpayers money in full.
            Link

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            • #21
              Originally posted by Zinja View Post
              Because that is what happens when companies go under liquidation and NOT chapter 11.


              Why do you assume they were going to liquidate?

              How about here for a start... .....and here Link
              So in other words, the government would be selling at a massive loss then hoping the stock hits 53?

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              • #22
                Originally posted by Wooglin View Post

                Why do you assume they were going to liquidate?
                'Restructuring' had produced insufficient results after the firs experiment with the government. Willing creditors had dried up, share price was going through the floor, there were no more options raise capital, they had to go hand in cap to the government. Without any financial backing from anywhere what option was available for them if not chapter 11? Even chapter 11 requires you to have capital to restructure and no credit lines were available, tell me what other options was available for them?

                Originally posted by Wooglin View Post
                So in other words, the government would be selling at a massive loss then hoping the stock hits 53?
                You asked me where i got my figures from, i gave you a source. If you have a beef with the price the shares were sold at, thats a different story. And before you liberally use 'massive loss' language all over the place, do some digging around and start adding up what the government has been enjoying all along in fixed preferential share interest, dividends (if any), interest on debentures (if any) since TARP. Consider if this IPO disposal was with *** or ex-rights, and then add all those figures together with the value of the remaining shares still held. Compare the final figure with what the government poured into GM. You will find that the difference may not be so 'massive' after all. You might be surprised to learn that actually the government can sell the remaining shares at less than $50 and still recoup its funds, or even make a profit. Do the math if you have the time.

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