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> Was there anything about how bondholders were robbed to pay off the union? I'm genuinely confused as to how this went unchallenged. Even if the bankruptcy of
by wikiburner 13y ago
> Was there anything about how bondholders were robbed to pay off the union?
I'm genuinely confused as to how this went unchallenged. Even if the bankruptcy of G.M. resulted in pennies on the dollar, those pennies still belonged to the share and debt holders, rather than their being arbitrarily wiped out by the government in order to benefit the union.
Were there/Are there any lawsuits to address this?
- skybrian 13y agoIn a bankruptcy the shareholders get nothing. Debt comes before equity and the union is one of the creditors. (But in any case, the union is hardly the only beneficiary of keeping GM afloat; it's not zero-sum.)
- wikiburner 13y agoYep, misspoke, just debt holders. Shareholders usually receive nothing. Regarding societal benefit of the bailout, even with imminent domain, the government has to give the owners fair compensation. It can't simply step in and disregard rule of law and pick and choose its preferred winners. Keeping GM afloat in no way excuses the preferential treatment. The unions hardly took a haircut at all compared to the bondholders: http://online.wsj.com/news/articles/SB10001424052702303768104577462650268680454 http://online.wsj.com/news/articles/SB1000142405270230376810... http://online.wsj.com/news/articles/SB124105303238271343 http://online.wsj.com/news/articles/SB124105303238271343