Sunday, July 5, 2009

Slate & Reuters Blow it

Matthew DeBord, who - according to Slate - " has written about the auto industry for the Washington Post, the Los Angeles Times, the Huffington Post, and Car Design News," posted an item on Slate's "The Big Money" blog today entitled "Please Name Dissident GM Bondholders, Please" and refers to a July 2nd post by Michael J. de la Merced.

Reuters then picked up that posting here.

In that post (in addition to the comment in the headline), Mr. DeBord wrote "Isn't this a transparent Chapter 11 proceeding, funded by, um...taxpayer money? Why can’t we learn the identities of these three holdouts?"

What is remarkable is that Patton Boggs, the law firm representing the bondholders (and mentioned in the NY Times post), filed the names of their clients on JUNE 9TH! This filing, required under Bankruptcy Rule 2019, is available on the public docket (paid for by GM) here.

Patton Boggs then filed an amendment to that filing, including details of their clients' trades, on June 26th - also available on the public docket here.

I don't know what to think about Slate. I tried to sign up to make these comments on their site, but they have not sent the promised password. After more than an hour of waiting, I decided to post my comments on this blog.

I am puzzled, however, about why Reuters, which is - deservedly - considered one of the most prestigious news organizations in the world, posted this story.

One of their reporters has been live blogging the GM proceedings on Twitter (some of which is here). They discussed the tribulations of one of the bondholders who is representing himself and seem, generally, to be on top of what is transpiring in the case (by the way, Mr. de la Merced has also been providing courtroom updates on Twitter).

Mr. DeBord, if you read this, you might want to use the resources available to you before posting such nonsense. Most news organizations subscribe to PACER, a paid service that provides subscribers with access to all court records for the Federal Judiciary (including the bankruptcy courts). For those of us who aren't willing to pay $0.50 per page, most large bankrupt companies retain a claim service firm that provide a website for posting relevant documents.

By the way, just to answer your question, the names of Patton Boggs' clients are Harold A. John, Mark Modica, and Wade McGee. If you need to harass them (although I don't know why any sane person would), their contact information is disclosed in the first filing.

The main site for obtaining information about the General Motors case (including the docket), is available at

Perhaps the editorial staff at Slate and Reuters don't review blog posts from "The Big Money" blog; or perhaps they were distracted by the Fourth of July holiday. But I expect more from them.

We all await Judge Gerber's decision. Whether or not he provides it before Monday, we know that he (and the lawyers on the case) have been working hard this holiday weekend.

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Anonymous said...

Thank you Thank You Thank You. This type of irresponsible blogging and reporting only fuels the fires of misinformation. Not only can you find the names and contact information but also as mentioned the trading including purchase information. You will find that one paid over par for his bonds. It is true that one paid pennies on the dollar. But the issue is lets not focus on the rape victims to see if they might have deserved what happened to them, but on the law that protects the victims from the attach in the first place. These three gentlemen are the faces of thousand of GM Bondholder that have been become victims of the Task Force over steeping the law. I don’t care if they got their bonds for FREE; the laws are applicable are the same. I too tried to comment and correct the error but the website is blocked from accepting comments. Thanks again for setting the record straight.

Lawrence D. Loeb said...

Thank you for your comment.

I agree that, regardless of the price that they paid, the owners of the bonds purchased a contractual obligation of General Motors (or one of its entities). They have every right to seek full payment (or as much as possible) for the claims that they purchased.

That said, the filing seems to greatly misstate the purchase price of Wade McGee's positions. Schedule B states that McGee "Currently holds 40,000 bonds valued at $2.625 (par value of current holdings is $1,000,000), as follows:"

That makes it seem that Mr. McGee owns $1.0 million of bonds purchased for $2.625.

I could believe that the average purchase price for the holdings was 2.625%, or $26,250 for $1.0 million face value of bonds.

The disclosure is confusing, at best.

Anonymous said...

The 40,000 bonds with $1,000,000 face are the $25 "Baby Bonds". If he paid $2.65 for a $25 face bond it equates to 10.6% or $106 per $1000 face. Oddly, the $2.65 per $25 bond is the number that appears in my account (Fidiity) for the bonds. THis number wa established in mid-june by broker auctions to determine the payments to bondholders that had Credit Default Swaps) CDS or default insurance. Upon looking at Exhibit B whihc outlines the purchases they range from a low of $1.20 to a high of $9.86, this is per $25 bond. The lowest price paid for 1,000 of th e 40,000 bonds was $0.048 cents per $1.00. The $2.65 with is $0.106 per $1 may be the weighted average, but I'd bet it is the current value as refelcted from teh CDS auction held June 12 I think. The$2.65 currently is the value that is shown in my abbout for both Fidility and Charles Schwab. Thank you again for speaking out.

Lawrence D. Loeb said...

Thank you again.

I appreciate the clarification.

It appears that there may be more than one bond (they list "RGM" and "BGM" bonds - perhaps "BGM" is baby GM?).

I hope your stock/warrants increase in value. Judge Gerber signed the sales order. It was reported by Michael J. de la Merced on the NY Times DealBook blog. He has also posted the opinion.