tag:blogger.com,1999:blog-197345115652214342.post8174379164085965538..comments2022-12-05T08:49:42.979-05:00Comments on Fear and Greed Blog: Will The Big Money Post a Comment About Their Big Mistake?Lawrence D. Loebhttp://www.blogger.com/profile/05600981191177652648noreply@blogger.comBlogger2125tag:blogger.com,1999:blog-197345115652214342.post-16016289865560949902009-07-06T17:33:02.106-04:002009-07-06T17:33:02.106-04:00Thank you for your comment.
To my knowledge, ther...Thank you for your comment.<br /><br />To my knowledge, there were at least two sets of attorneys contesting the GM 363(b) sale on behalf of bondholders. One, the attorneys from <a href="http://www.pattonboggs.com/" rel="nofollow">Patton Boggs</a> represented the 3 bondholders mentioned in my post; the other was Oliver Addison Parker, who represented himself.<br /><br />Judge Gerber's decision, unless overturned by appeal, will end any influence that the bondholders will have over the 363(b) process.<br /><br />There may be proceedings in the future relating to the distribution of the 10% equity stake among the bondholders and other unsecured creditors. This, however, will be done under the supervision of Judge Gerber.<br /><br />The three holdouts disclosed by Patton Boggs were, according to them, only a few of the many bondholders that did not have (or, perhaps, want to have) their names disclosed.<br /><br />Under the automatic stay granted under Chapter 11, there will be no "lawsuits" per se.<br /><br />Any impaired creditor (a creditor who is receiving less through the bankruptcy process than owed them under existing contracts) may contest the distribution of assets under a plan. In this case, however, the 363(b) process is removing the bulk of assets from the Estate that will be distributing the assets.<br /><br />In GM, unlike Chrysler, the secured creditors were unimpaired (they will become, as I understand it, creditors of NewGM with essentially the same terms as existed prior to the bankruptcy). The secured creditors, therefore, were not in a position to contest the 363(b) sale - if they had wanted to.<br /><br />The bondholders, however, will be receiving a portion of the 10% equity and 15% warrants distributed to the Estate. That compensation is generally considered to be worth less than 10% of the principal due on the bonds. The bondholders, therefore, are impaired creditors.<br /><br />I'm not sure what else you mean by "significant effects."Lawrence D. Loebhttps://www.blogger.com/profile/05600981191177652648noreply@blogger.comtag:blogger.com,1999:blog-197345115652214342.post-17662569267492909702009-07-06T17:11:02.735-04:002009-07-06T17:11:02.735-04:00It seems that the hold outs can be an important pi...It seems that the hold outs can be an important piece in bankruptcy, even if they only represent a very slim minority of bondholders.<br /><br />It seems like they can exercise a surprisingly high degree of influence over a company's court proceedings. <br /><br />Would you say this is accurate? And, more importantly, are there other significant effects besides potential lawsuits?Anonymousnoreply@blogger.com