Editorial - April 30th, 2009 - Wall Street Journal
The feds have decided they should own a neat 50% of GM, yet that is not the natural [or legal] outcome of the $16.2 billion that the Treasury has so far lent to the company. Nor is the 40% ownership of GM that the plan awards to the United Auto Workers a natural [or legal] result of the company's obligations to the union.
The Obama regime has proposed the following to settle the debts and obligations of the company formerly known as General Motors:
Existing stockholders are totally wiped out, for 0% of their stock's value.
The current GM debtors which are owed $27.2 billion get 10% of the stock in the new company, which is less than 5% of their debt's value.
The unions which are owed $20 billion get 40% of the company and $10 billion in cash obligations, which is 76% of their previous value.
The federal government which is owed $16.2 billion gets 50% of the stock AND $8.1 billion in bonds, or 87% of the bailout's value.
This is a government and union rape job of a corporation that was destroyed by the unions. The government is blackmailing the creditors and screwing stockholders to take amounts that are totally unfair under the law. When Mussolini did this it was called fascism. Why is no one pointing this out?