May 3, 2009 in Letters

GM stock division is issue

The Spokesman-Review
 

The April 28 column by Harold Meyerson is what happens when an extreme ideologue is a columnist, notwithstanding that it is an opinion piece. He is either ignorant or purposely leaves out pertinent facts relative to his diatribe against the bondholders of General Motors. The issue is how much of GM should the UAW and the bondholders respectively receive.

Obama is going to give the UAW 39 percent of the stock for $20.4 billion of debt for the health fund. Obama is offering the bondholders 10 percent of the stock for a debt of $27 billion of debt. Why should the union get three times more stock for 20 percent less of the debt?

The bondholders want equity, which the courts will give them if GM declares bankruptcy. This is all public knowledge and was in the Wall Street Journal.

Lastly, most of the bondholders’ debt was issued to cover the health plan in 2003; how ironic.

Jack L. Thompson

Spokane


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