GM is having a banner year, post government bailout and chapter 11 filing, and announced a $9 billion stock buy back program. Why don't they buy back some of the pre-bailout GM stocks that became worthless?
Asked by
ibstubro (
18804
)
January 13th, 2016
I’m a taxpayer.
I helped bail GM out.
I lost hundreds of dollars in stocks betting on the original GM.
Stock buy-backs enrich the biggest shareholders and company officials.
How about some largess for us little guys that believed in the company before the previous management ran it into the ground?
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3 Answers
They don’t have to – different company entirely – legally, technically and everything else. There is no legal connection between the old (bankrupt) GM and the new GM.
Among other things, that’s why GM has no liability on the Chevy Volt airbag problems (and other recalls) – the did pay up voluntarily, but there is no requirement for them to do so.
The pre-bailout GMC stock was delisted and has no value at all. It was made worthless at the time of bankruptcy.
So even if GM (today) decided to pay back something – which they won’t – on what basis should they make the payment?
people who owned the stock in 1990? People who owned the stock in 2008 the day before bankruptcy? People who lost money between 2000 and 2008?
There’s no fair way to do this,
The shareholders of the old GM stock were the owners that hired incompetent management and gladly accepted dividends as the old management mortgaged everything to the hilt. So when the company avoided its debts through bankruptcies, the owners avoided liability through the courts.
The old shareholders would have to be in line behind all those who got pennies on the dollar during the bankruptcy, including the $10.5 billion the US Treasury lost on its bailout.
And many would argue the restructuring and retirement of debt through the bankruptcy court is what has allowed it to thrive today.
Through my wisdom I have bought Honda and Acura products over the years.
Still, through the bailout I was forced to help pay for some hapless soul’s Chevrolet.
To make matters worse, through subsidies I’m still forced to pay so that someone can drive their lame ass Chevy Volt (known and the AMPera in foreign markets, ooh how clever with the naming) at a drastically reduced lease rate.
The way I see it the fed owes me a big ass check for paying for cars I wouldn’t even be caught dead being seen in.
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