Case in Point: GM.
But now, poor little chrysler is in Chapter 11.
Oh shades of Lee Iococca.
Oh those mean old bond-holders who wanted all their money.
oh mean Mr. Grinch, you steal me blind.
It will be good for them...
In a related AP/ABC article, I found this subtle quote:
The administration also said there will be no layoffs associated with the bankruptcy.
Although dealerships will eventually take a hit and will be closed over time, but it is unclear at this point exactly how many.
The company will be able to operate normally during the bankruptcy process. Americans will be able to buy Chrysler cars and warranties will be honored.
So, I guess my prediction rate is still pretty good...
Oh, and regarding those terrrible Hedge funds that refused to negotiate?
The article also says that:
...(statistics from (yeah?) "well-known bankruptcy expert Lynn LoPucki's Web site that tracks (bankruptcy) filings (and) found that from 2000 to the present,
that the length of the median "pre-negotiated" bankruptcy case was about 5.3 months. During the same period, the length of the median "prepackaged" case was about 52 days, according to the same data source.
"Prepackaged" means that the debtor drafted the plan and successfully solicited votes on it before filing the case. Prepackaged cases nearly always are filed solely to modify the company's liability on junk bonds. Once filed, these cases move very quickly.
"Prenegotiated" means that the debtor negotiated the terms of the plan with some, but not all creditor groups before filing -- even if no prefiling vote was taken on the plan. An example would be a plan to sell the debtor's business, which has been drafted and negotiated with a large secured creditor before filing, but not with trade creditors.
So it looks like the junk bond (and hedge funds) will LOSE this fight....
And who knows, maybe we will have a new viable car company...
We can pray.
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