Check out these details in regard to the bankruptcy of General Motors:
It also gives a union-run retiree health care trust 17.5 percent ownership of a post-bankruptcy protection GM, with a warrant to buy another 2.5 percent. The trust will take on the company's retiree health care costs starting next year. The stock will come in exchange for part of the company's $20 billion obligation to the trust.
GM has received $19.4 billion in loans from the U.S. government, which would get 72.5 percent ownership of the new company, perhaps sharing with the Canadian government. The remaining 10 percent would go to GM bondholders to wipe out $27 billion in unsecured debt.
Bondholders have until 5 p.m. EDT Saturday to accept or reject the stock-for-debt offer, under which they would get a warrant for an additional 15 percent of the new GM's stock.
So we have the government and the labor unions into GM for $20 billion each, with the bondholders (who are suppose to be first in line during bankruptcy) holding $27 billion. So why would they only get 10% ownership and the government gets 72.5%, with labor getting 17.5%? Wasn’t it the regulations of government and the high cost of labor that put GM into poverty in the first place? If I was a bondholder I would say forget it. Liquidate the company and gives us our share. Why would I want to be minority owner in a socialist entity?